1. What Happened?: Q1 2025 Earnings Summary

Gwangju Shinsegae recorded sales of KRW 44.5 billion and operating profit of KRW 11.8 billion in Q1 2025, a decrease of 1.9% and 8.5% YoY, respectively. Net profit also fell by 15.9% to KRW 9.5 billion. The decline in sales in the department store division was identified as the main cause.

2. Why These Results?: Analysis of the Earnings Decline

Weakened consumer sentiment and the economic downturn are the main reasons for the decline in department store sales. As high inflation and high interest rates persist, consumers’ purchasing power has decreased, directly impacting department store sales. However, the U-Square Terminal business generated stable profits, demonstrating its potential as a future growth engine.

3. What’s Next?: Outlook and Investment Strategies

The impact of the economic downturn is expected to continue in the short term, but the growth of the U-Square Terminal business and efforts to strengthen the competitiveness of the department store division can be positive factors. In the long term, whether synergies are created between the U-Square Terminal and the department store will be a key factor determining stock price trends.

4. What Should Investors Do?: Action Plan

  • Short-term investors: A conservative approach is necessary.
  • Mid- to long-term investors: Focus on the possibility of economic recovery and the performance of the U-Square business.
  • Key Checkpoints: Synergy between the U-Square business and the department store, timing of economic recovery.