KOSPIRetail & Consumer069960

Hyundai Department Store

₩89,000▼ 0.22%2026-10-02 close

Market Cap

₩1.9T

Turnover

₩4.8B

Volume

50,000 shares

Shares out.

21.6M

PER

8.9×

PBR

0.4×

EPS

₩10,784

Dividend Yield

2.23%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,150 per share · Prices as of the 2026-10-02 close

Report overview

Record Core Retail Meets Zinus Losses

The core department store business posted record quarterly revenue on inbound demand, yet losses at U.S.-focused mattress affiliate Zinus continue to offset consolidated results.

1
Q2 2026 consolidated revenue was KRW 1,068.1bn with operating profit of KRW 79.3bn, down from KRW 98.8bn in Q1 2026.
2
The department store division reported Q2 2026 net revenue of KRW 643.8bn (up 9.1% year on year) and operating profit of KRW 110.1bn (up 58.6%), a quarterly record (company filing, Aug 5, 2026).
3
Duty free posted a fourth straight quarterly profit with KRW 6.2bn in Q2 2026 operating profit, and broadened categories after starting operations in Incheon Airport zone DF2 in April.
4
Zinus saw Q2 2026 net revenue fall 35.7% with an operating loss of KRW 26.7bn, as demand stayed weak after price hikes taken to offset U.S. tariffs.
5
For FY2025, revenue was KRW 4,230.3bn and operating profit KRW 377.9bn (8.9% margin), moving past the owner-basis net losses of 2023-2024.

Business structure

Hyundai Department Store runs domestic department stores as its core business, consolidating Hyundai Duty Free and Zinus, a U.S.-centric mattress and furniture maker, as subsidiaries.

Divisional net revenue in Q2 2026 was disclosed as KRW 643.8bn for department stores, KRW 310.4bn for duty free and KRW 147.5bn for Zinus (per the Aug 5, 2026 filing).

The department store division skews toward high-ticket categories such as luxury goods, watches, jewelry, fashion and living, and foreign customer sales have recently become a core growth driver.

First-half foreign sales growth was 134% at The Hyundai Seoul and 131% at the Trade Center branch, with foreigners accounting for about 20% of sales at both stores.

In duty free, the company added Incheon International Airport zone DF2 in April, extending beyond luxury, fashion and accessories in zones DF5 and DF7 into cosmetics and liquor. Zinus generated 81.2% of its 2025 revenue in the United States, with Amazon and Walmart as its main sales channels.

It competes in a three-way structure with Lotte and Shinsegae, and combined first-half foreign customer sales across the three players were estimated at around KRW 1.72tn. A new growth project is The Hyundai Gwangju, a complex mall on the former Jeonnam Spinning and Ilshin Spinning site in Buk-gu, Gwangju.

At group level, dividend and treasury share policies are run per affiliate under a holding structure headed by Hyundai GF Holdings.

Earnings trend

Quarterly revenue · Operating profit

₩1.1T₩86.9B25Q2₩1T₩72.7B25Q3₩1T₩105.9B25Q4₩950.1B₩98.8B26Q1₩1.1T₩79.3B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩5T₩320.9B2022₩4.2T₩303.5B2023₩4.2T₩284B2024₩4.2T₩377.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.1T	₩86.9B	8.0%
2025Q3	₩1T	₩72.7B	7.2%
2025Q4	₩1T	₩105.9B	10.2%
2026Q1	₩950.1B	₩98.8B	10.4%
2026Q2	₩1.1T	₩79.3B	7.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩5T	₩320.9B	₩144.1B	6.4%	123.1%	89.6%
2023	₩4.2T	₩303.5B	-₩79.8B	7.2%	−1.8%	86.5%
2024	₩4.2T	₩284B	-₩35.9B	6.8%	−0.8%	79.9%
2025	₩4.2T	₩377.9B	₩207.7B	8.9%	4.6%	78.3%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On confirmed annual figures, revenue slipped from KRW 5,014.1bn in 2022 to KRW 4,207.5bn in 2023 and KRW 4,187.6bn in 2024, before edging up to KRW 4,230.3bn in 2025.

Operating profit over the same years was KRW 320.9bn, KRW 303.5bn, KRW 284.0bn and KRW 377.9bn, with the operating margin tracking 6.4%, 7.2%, 6.8% and 8.9%. Owner-basis net income moved from losses of KRW 79.8bn in 2023 and KRW 35.9bn in 2024 to a profit of KRW 207.7bn in 2025.

Operating cash flow rose from KRW 733.9bn in 2024 to KRW 986.2bn in 2025, while the debt-to-equity ratio fell from 89.6% in 2022 to 78.3% in 2025.

Quarterly operating profit was KRW 86.9bn in Q2 2025, KRW 72.7bn in Q3, KRW 105.9bn in Q4, KRW 98.8bn in Q1 2026 and KRW 79.3bn in Q2 2026, showing swings rather than a steady trend.

First-half 2026 totals were revenue of KRW 2,018.1bn and operating profit of KRW 178.1bn; revenue dipped to KRW 950.1bn in Q1 2026 before recovering to KRW 1,068.1bn in Q2, yet the operating margin eased from roughly the 10% area in Q1 to the 7% area in Q2.

Explaining the gap, the company said in its divisional disclosure that department stores and duty free grew while Zinus's revenue decline and operating loss dragged down consolidated results.

One-off items also mattered at Zinus: 2025 revenue of KRW 913.2bn came with operating profit of KRW 25.8bn, a swing to profit that reflected roughly KRW 36.6bn of provisions reversed after winning an anti-dumping duty case.

Hyundai Department Store also booked goodwill impairments of KRW 35.8bn in 2022 and KRW 258.3bn in 2023 after acquiring Zinus, plus a further KRW 205.6bn in 2025, taking cumulative impairments to KRW 499.7bn, or 56.8% of the KRW 879.0bn purchase price.

Industry analysis

Korea's department store channel emerged from a weak first half of 2025 and staged a notable recovery in 2026.

According to the Ministry of Trade and Industry, first-half 2026 department store sales rose 20.1% year on year versus 0.5% a year earlier, helped by the consumer sentiment index rising from 97 to 107 and inbound visitors increasing from 8.83m to 10.71m, while overseas premium brand sales jumped 30.8%.

Over the same period hypermarkets and super supermarkets contracted, widening the gap between formats. Peers benefited from the same drivers.

Lotte Shopping's department store division reported first-half net revenue of KRW 1,622.1bn (up 8.7%) and operating profit of KRW 310.9bn (up 59.4%), while Shinsegae's department store revenue rose 14.9% to KRW 1,479.4bn.

In other words, the strength in Hyundai's core business rests heavily on channel-wide variables such as inbound tourism and wealth effects, not only company-specific factors. Major operators are pushing complex-mall openings that extend the traditional department store format as experience-driven consumption expands.

That said, even with research institutes expecting a modest improvement in private consumption in 2026, industry views are not uniformly optimistic given rising price sensitivity and cuts to non-essential spending.

Meanwhile the U.S. mattress market where Zinus operates sits directly in the path of trade variables, including the 19% reciprocal tariff applied to Indonesian-made goods, so it moves on a different cycle from domestic retail.

Outlook

With its Q2 2026 results, the company said foreign customers' spending is broadening from overseas luxury into Korean fashion and beauty brands, and it expects growth to continue in the second half.

For second-half strategy it cited upgrades to the language support and real-time translation features of its AI shopping assistant "Heidi Global," plus stronger tailored marketing centered on The Hyundai Seoul and the Trade Center branch.

On overseas partnerships, it plans reciprocal VIP tie-ups with Siam Piwat of Thailand, Hankyu of Japan and Marina Bay Sands of Singapore, and to extend the alliance into China and Europe.

In duty free, the April start of operations at Incheon International Airport zone DF2 is expected to keep supporting airport expansion and downtown store profitability.

At Zinus, new ODM revenue is guided to contribute from the second half of 2026 alongside utilization management in Cambodia and Indonesia and an ongoing business restructuring, and the loss-making Georgia plant in the United States is being sold for KRW 135.3bn to improve profitability and the balance sheet.

New store timing has slipped.

The Hyundai Gwangju developer obtained its construction start certificate and began foundation work, with a target completion date of May 2029 on the filing, versus an original roadmap of completion in late 2027 and opening in the first half of 2028, delayed by contractor selection and start-of-construction procedures.

As the build period lengthens, total construction costs once estimated in the KRW 1.2tn range are seen rising to around KRW 1.5tn.

On the brokerage side, Daishin Securities said in a June 2026 report that it raised its 2027 operating profit forecast to KRW 499.0bn, projecting department store operating profit of KRW 614.0bn in 2027 while forecasting a KRW 78.0bn operating loss at Zinus in 2026.

Valuation

PER

8.9×

PBR

0.4×

ROE

5.1%

EPS

₩10,784

BPS

₩216,902

Dividend per share

₩2,150

The earnings direction turned from owner-basis net losses in 2023-2024 to a profit in 2025, and the four most recent quarters (Q3 2025 through Q2 2026) sum to owner-basis net income of KRW 231.6bn.

That recovery, however, comes from a structure in which department store and duty free improvement offsets Zinus losses and impairments, leaving quarterly earnings swings wider than at many domestic retail peers.

On a price-to-book basis the shares trade at a discount to net assets, which is not unrelated to the fact that much of equity sits in non-controlling interests and property-type assets, and to the record of repeated Zinus-related impairments.

On shareholder returns, the company has introduced an interim dividend, plans to expand total dividends toward about KRW 50bn on a 2027 payment basis, and intends to buy back and cancel roughly KRW 21bn of new treasury shares this year, so the frequency and range of return tools is widening.

For reference, analyst Park Jong-ryul at Heungkuk Securities was reported to have set a target price of KRW 270,000 in a June 2026 report; that is the broker's view, not KOSAI's. Ultimately the valuation debate hinges on two variables: the durability of core retail earnings and the pace at which Zinus losses shrink.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Inbound Demand Drives Record Core Results

The department store division posted Q2 2026 net revenue of KRW 643.8bn, up 9.1% year on year and a record for a second quarter, with operating profit up 58.6% to KRW 110.1bn; first-half figures also hit records at KRW 1,276.4bn in net revenue (up 8.3%) and KRW 246.0bn in operating profit (up 47.7%).

Hyundai's first-half sales to foreign customers were roughly KRW 500bn, more than 70% of last year's full-year figure of about KRW 700bn in just six months. The core bull case is that revenue growth combined with fixed-cost leverage sharply lifted divisional margins. Category demand is also broadening beyond luxury into fashion, beauty and living.

Duty Free Turns Consistently Profitable

Duty free net revenue rose 5.8% to KRW 310.4bn in Q2 2026 and operating profit of KRW 6.2bn reversed a KRW 1.3bn loss a year earlier, marking a fourth consecutive profitable quarter and first-half operating profit of KRW 9.6bn.

The April start of operations in Incheon International Airport zone DF2 broadened the assortment into cosmetics and liquor. A division that long weighed on consolidated earnings now contributes profit, which matters for the earnings mix. Absolute profit remains small relative to the department store division, however.

Improving Cash Flow and Leverage

Operating cash flow rose from KRW 489.4bn in 2022 to KRW 733.9bn in 2024 and KRW 986.2bn in 2025. The debt-to-equity ratio declined from 89.6% in 2022 to 86.5%, 79.9% and 78.3% in the following years.

Alongside governance restructuring, the Hyundai Department Store Group has combined higher cash dividends with share cancellations, and the company disclosed an interim dividend plus plans to buy back and cancel new treasury shares. With a large store investment cycle to fund, the underlying cash generation itself counts as a positive.

Bear factors

Zinus Losses and Tariff Exposure

Zinus net revenue fell 35.7% to KRW 147.5bn in Q2 2026, swinging to an operating loss of KRW 26.7bn. Cumulative first-half operating losses reached KRW 56.8bn.

With a 19% U.S. reciprocal tariff on Indonesian-made goods and 81.2% of Zinus's 2025 revenue coming from the United States, concerns have been raised that concentrated production sites leave it vulnerable to external shocks. The key question is whether core retail gains keep being offset at the consolidated level.

Funding Burden and Delays at The Hyundai Gwangju

Hyundai Department Store injected KRW 60bn to establish The Hyundai Gwangju, followed by KRW 250bn in a December 2024 rights issue and a planned KRW 150bn more in three KRW 50bn tranches in January, March and May 2026, lifting total contributions to KRW 460bn once complete.

With large sums tied up, concerns have been raised about liquidity strain and delayed capital recovery. The filed target completion date is May 2029, raising the likelihood that opening shifts from 2028 to 2029. That pushes back when the new store can contribute to profit.

Reliance on External Tailwinds

Growth in the department store channel in the first half of 2026 was heavily driven by the consumer sentiment index rising from 97 to 107 and inbound visitors climbing from 8.83m to 10.71m. Observers also note that wealth effects from a strong equity market supported spending on luxury, jewelry and watches.

If variables outside the company's control such as exchange rates, inbound travel and asset prices reverse, same-store growth could decelerate quickly. Commentary also flags the risk that rising price sensitivity and cuts to non-essential spending persist.

Risk factors

Trade and Tariff Risk

Zinus said it raised mattress prices to cushion tariffs, but that consumer resistance curbed near-term demand and prolonged tariff uncertainty kept major customers' orders conservative. Management described Amazon as its toughest channel, with price increases eroding competitiveness there.

Any reset in tariff rates or rules of origin could again change the profit profile and production allocation. A slowdown in U.S. consumption would push in the same direction.

One-Off Losses and Asset Valuation

Zinus-related goodwill and brand impairments were booked repeatedly at KRW 35.8bn in 2022, KRW 258.3bn in 2023 and KRW 205.6bn in 2025, reaching KRW 499.7bn cumulatively. Impairments hit net income rather than operating profit, so they can amplify swings in owner-basis net income even when operations improve.

Conversely, the Georgia plant disposal generated a gain of about KRW 31.8bn, mixing one-off profits into the picture. That makes quarterly net income alone an unreliable guide to the trend.

Regulation, Local Coexistence and Capex Execution

Gwangju City is fully launching a complex-mall coexistence council following the groundbreaking, planning to discuss measures such as local tenant inclusion and traditional market linkages based on a commercial impact assessment. Coexistence conditions and permitting can affect both opening timing and tenant mix.

On the construction side, it was noted that stakeholder interests are complex and that the Champions City development has stalled, so progress needs monitoring. A longer build period also raises the possibility of higher project costs.

What to watch next

Sept 30 and Oct 30, 2026
The interim dividend approved by the board on Aug 5, 2026 carries a record date of Sept 30 and a payment date of Oct 30. Whether the interim payout becomes routine is a gauge of actual delivery on the return policy.
Early November 2026
In the Q3 2026 disclosure, watch the department store division's net revenue growth and margin, whether duty free stays profitable, and how far Zinus's operating loss narrows. Consolidated Q3 2025 operating profit of KRW 72.7bn is the comparison base.
Around each month-end
In the Ministry of Trade and Industry's monthly retail sales data, tracking department store sales growth (20.1% in the first half of 2026) and overseas premium brand growth offers an early read on shifts in same-store momentum.
Second half of 2026
Items to verify include whether Zinus's new ODM revenue contributes from the second half of 2026, the recovery in Indonesian and Cambodian utilization, and the flow-through of restructuring effects. Disclosure of contract terms will determine when results reflect it.
Around February 2027
With the FY2026 results and dividend decision, check whether the annual operating margin holds near the 8.9% seen in 2025, whether further Zinus-related impairments are recognized, and whether a path is laid out for expanding total dividends toward about KRW 50bn on a 2027 payment basis.

Overall view

Hyundai Department Store's recent results can be summed up as record core retail alongside flat consolidated earnings.

The department store division delivered record quarterly revenue in Q2 2026, with net revenue of KRW 643.8bn (up 9.1%) and operating profit of KRW 110.1bn (up 58.6%), and duty free stayed profitable for a fourth straight quarter, yet consolidated operating profit of KRW 79.3bn was below the KRW 98.8bn posted in the prior quarter.

Most of that gap traces to Zinus, where net revenue fell 35.7% and an operating loss of KRW 26.7bn was recorded.

For FY2025, revenue of KRW 4,230.3bn and operating profit of KRW 377.9bn (8.9% margin) came with owner-basis net income of KRW 207.7bn, ending two years of net losses, while operating cash flow reached KRW 986.2bn and the debt-to-equity ratio improved to 78.3%.

The positives are same-store growth built on inbound and luxury demand, better duty free economics and a wider set of return tools; the negatives are Zinus's tariff exposure and repeated impairment history, plus the funding and timing burden of The Hyundai Gwangju, whose target completion slipped to May 2029.

What remains to be verified is the durability of core growth, the pace at which Zinus losses shrink, and how the large store investment is executed. This material is for information purposes and contains no buy or sell opinion or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.