IBK Securities announced on October 14 that it has lowered its target price for Hyundai Department Store to 150,000 won, citing a potential slowdown in profit growth for the department store's business segment. The investment recommendation remains a 'buy.'
Nam Seong-hyun, a researcher at IBK Securities, stated in a report that "the high base from last year and the profit margin increase due to strong clothing sales in the fourth quarter of 2025 have contributed to this analysis. However, there is a high possibility of reduced consumer spending capacity due to changes in the macroeconomic environment."
He added, "This year, the increase in foreign investment and rising asset values have positively impacted consumer spending. However, in 2027, factors such as rising financial costs due to interest rate hikes and increased living expenses for lower and middle-income households may restrict consumption."
For the third quarter, IBK Securities expects a return to growth. Nam estimates consolidated sales at 1.0481 trillion won and operating profit at 83.9 billion won, explaining that the favorable department store market conditions are likely to continue into the third quarter, driving overall performance. Additionally, he anticipates a recovery in sales for Zinus, which is expected to reduce its losses compared to the previous quarter.
However, the duty-free business segment is expected to see a decline in profitability. Nam noted, "Due to the burden of cost rates from currency depreciation, profitability is expected to worsen, leading to a decrease in profit compared to the previous quarter."
* This article has been translated by AI.
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