Shilla Duty Free has become more profitable.

South Korea’s Shilla Duty Free saw unaudited revenue in the second quarter (ending June 2026) fall below 800 billion Korean won due to a year-on-year (YOY) double-digit decline in airport revenue following a concession exit from Incheon Airport (ICN) in April.

However, the company’s strategic focus on profitability is continuing to reap rewards, with another quarter in positive territory – and treble the retailer’s Q1 result.

In numbers, Q2 travel retail revenue fell by –9.1% YOY to KRW772.6bn ($545m*) while operating profit increased to KRW36.4bn ($25.7m). In the same period in 2025, the company was loss-making to the tune of KRW11.3bn, indicating a solid turnaround in the three months to June. Moreover, the Q2 profit was three times that of Q1’s KRW12.2bn, which should give investors confidence that the ICN exit was the correct decision.

A large Q2 revenue decline was inevitable. 

As expected, airports see a downturn

Breaking down the travel retail revenue profile, parent company Hotel Shilla noted that downtown increased by +2% YOY and airports decreased by -17.4%. Having vacated the DF1 zone at Incheon Airport, it is now in the hands of returnee Lotte Duty Free. Shilla also has duty-free operations at the airports of Singapore Changi International (8,044sq m) and Hong Kong International (3,636 sq m).

Hotel Shilla – whose other, much smaller, business division is Hotel & Leisure – added that it would continue to focus on profitability recovery in travel retail in the current quarter ending September. This, it said, is “in response to changes in the internal/external environment” of the market.

At the top line across the whole business, Hotel Shilla’s total consolidated revenue decreased by -5.2% YOY to KRW971.8bn, with operating profit soaring by +602% YOY to KRW61.1bn.

* FX conversions at today’s rate.

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