Korea Consumer Our thoughts on recent market volatility

研报英文原文证据摘录

Korea Consumer Our thoughts on recent market volatility

21 July 2026

Korea Consumer EquitiesConsumer

Our thoughts on recent market volatility Korea

◆ Department store operators’ share prices are down 18-21% Karen Choi*

from their peak in mid-June (vs. KOSPI down 25%) HeadThe Hongkongof Consumerand Shanghai& Retail Research,Banking CorporationAsia Pacific

Limited, Seoul Securities Branch

◆ Increasing contribution from foreigners is likely to continue; karen.choi@kr.hsbc.com

however, luxury sales may slow down a bit in 4Q 2026 +82 2 3706 8781

Sophia Jung*

Associate, Consumer Research

◆ Retain Buy on HDS and Lotte Shopping, Hold on Shinsegae; The Hongkong and Shanghai Banking Corporation

raise TPs on stronger-than-expected 2Q outlook Limited,sophia.jung@kr.hsbc.comSeoul Securities Branch

+822 3706 8774

What’s on our mind?

Department store sales started to record double-digit growth from October 2025 on * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

the back of strong luxury growth and a pick-up in apparel sales. The sales trend has

accelerated in 2Q with April and May sales up 22-25% y-o-y (vs. up 18% in 1Q26, up

11% in 4Q25, source: MOTIE). The luxury category continues to lead the growth, and

we believe the underlying growth drivers are: 1) the wealth effect via a strong KOSPI

market; 2) polarization of spending; and 3) an increasing sales contribution from

tourism flows. We think tourism flows are likely to continue; however, recent market

volatility may result in softer luxury sales growth, especially with a high base effect

kicking in from October 2025. We continue to forecast double-digit sales growth until

3Q but assume mid- to high-single-digit sales growth in 4Q 2026.