Shinsegae, the South Korean department store and duty-free operator, said on Tuesday that its third-quarter operating profit rose 64.6% from a year earlier to 164.3 billion won ($122.2 million), the largest it has ever reported for a July-to-September period. Sales grew 3.2% to 2.9 trillion won, according to Korea JoongAng Daily.

The driver was foreign shoppers. Shinsegae said sales to foreign customers reached 850 billion won in the first nine months of the year, more than double the same period of 2025 and a record for the company. For investors who track Korean consumer stocks from Hong Kong, Singapore or Tokyo, the results show how much of the country's retail recovery now depends on visitors rather than on domestic households.

Shinsegae also said it will double its quarterly dividend from the previous payout, starting this quarter, and cancel treasury shares.

Shinsegae's flagship stores lead the gain

The department store business, which includes the separately incorporated branches in Gwangju, Daegu and Daejeon, posted sales of 1.86 trillion won, up 8.5%. Its operating profit rose 23.5% to 103.7 billion won. Those figures leave out Shinsegae Simon, the joint venture that runs the group's premium outlets.

The biggest jump came at the main store in Jung District, central Seoul, close to the Myeongdong shopping area, where sales rose 44% from the third quarter of 2025. The Gangnam store in southern Seoul grew 17%, and the Centum City store in Busan rose 14%.

Tourist traffic explains much of that. Seoul drew a record 11.56 million foreign visitors from January through August, up 21.6% from a year earlier, the city government said in October. Foreign card spending in the city over the same months rose 59.9% to 7.78 trillion won, and spending at large shopping malls climbed 77.5%. Myeongdong was the most visited area for foreign tourists in August, the city said. Visitors from China, Japan and Taiwan made up 66.4% of the total that month.

Duty free returns to profit

Among subsidiaries, Shinsegae Duty Free earned an operating profit of 25.3 billion won, against a loss of 5.6 billion won a year earlier. Revenue fell 16.3% to 451.1 billion won, which suggests the improvement came from margins rather than volume. The company has moved away from price competition toward services aimed at independent travelers, such as premium airport pickup, according to Korea JoongAng Daily.

Shinsegae International swung to an operating profit of 5.1 billion won from a 4.3 billion won loss as revenue rose 16.6% to 299.5 billion won. Shinsegae Central, which benefited from hotel demand from foreign guests, increased its operating profit by 13% to 31.2 billion won.

A Shinsegae representative credited the department store business and a better operating structure at its subsidiaries for the record result, adding that the company will keep investing in the future.

Rival Lotte also leans on visitors

Shinsegae is not alone. Lotte Shopping said on Friday, Nov. 6, that it swung to a third-quarter net profit of 142.4 billion won from a 48.7 billion won loss a year earlier, according to a regulatory filing cited by Yonhap. Its operating profit rose 34.5% to 175.6 billion won on sales of 3.65 trillion won. Lotte pointed to higher foreign tourist spending at its Korean department stores and strong hypermarket sales in Vietnam, where it runs three department stores and 17 hypermarkets.

The two groups are also reshaping their store networks. Lotte Shopping agreed on Oct. 29 to sell its Centum City department store in Busan to Shinsegae, which already operates a store of the same name in the city, as part of what Lotte called a "select and focus" strategy. The deal needs approval from the Fair Trade Commission, and Shinsegae said it has filed for permission to combine the two Busan stores. Shinsegae Chief Executive Park Joo-hyung said the company plans to turn the site into "Shinsegae Town," mixing shopping, culture and tourism. Shinsegae runs 13 department stores in Korea and none overseas.

Other Korean consumer names also reported stronger home sales this season, including Amorepacific, whose third-quarter operating profit rose 25%.

The open question for shareholders is how long visitor spending can grow at this pace once the comparison base catches up. The next test is the Fair Trade Commission's review of the Busan deal, which will decide whether Shinsegae can merge its two Centum City stores in Busan.