Emart Reports 35% Drop in Q1 Operating Profit... Traders and Others Show Some Resilience

Q1 Consolidated Operating Profit of 48.4 Billion KRW
Separate Basis 85.4 Billion KRW
Strong Performance by Traders, Everyday, and Property
Restructuring of Loss-Making Businesses
Withdrawal of Show & Tell, Boots, and Pierrot

[Asia Economy Reporter Cha Min-young] Emart received a relatively favorable report card in the first quarter of this year despite the impact of the novel coronavirus disease (COVID-19). The warehouse-type store Traders posted steady profits, while subsidiaries such as Everyday and Property showed strong performance. Loss-making business restructuring for improving the business structure was also swiftly carried out.

Emart announced on the 13th through a disclosure that its consolidated operating profit for the first quarter of this year recorded 48.4 billion KRW, down 34.8% compared to the same period last year. During the same period, sales increased by 13.6% to 5.2108 trillion KRW, while net profit decreased by 36.1% to 44.5 billion KRW.

On a separate basis, Emart posted an operating profit of 85.4 billion KRW, down 20.0% year-on-year, due to the overall sluggishness in the distribution industry. Emart explained that the COVID-19 issue since the beginning of the year and the impact of two fewer holidays compared to the previous year were reflected. Quarterly sales increased by 2.3%, but selling and administrative expenses rose by a larger margin of 2.7%.

There was also a significant gap among Emart’s business divisions. In the core discount store business, the quarterly same-store sales decline narrowed to -2.4% from -3.4% in the previous year, showing improvement. Specialty stores closed 59 stores last year and reduced 21 stores this year across three brands (Show & Tell, Boots, and Pierrot Shopping). However, the warehouse-type store Traders succeeded in both external growth and strengthening fundamentals, with sales and operating profit increasing by 21.8% and 22.4%, respectively, compared to the same period last year.

Most major consolidated subsidiaries also recorded operating losses. SSG.com posted a loss of 19.7 billion KRW, followed by Shinsegae Chosun Hotel (-14.8 billion KRW), Emart24 (-8.0 billion KRW), Shinsegae Food (-4.0 billion KRW), the U.S. corporation (-3.5 billion KRW), and the Vietnam corporation (-0.1 billion KRW). However, Everyday (11.4 billion KRW) and Property (2.8 billion KRW) posted operating profits.

As of 2020, Emart’s domestic discount stores totaled 140, and Traders stores numbered 18. Expanding overseas, there are zero stores in China, one store in Vietnam, three stores in Mongolia, and 52 stores in the United States. In particular, the number of stores in the U.S. significantly increased this year following the acquisition of New Seasons Market in January, which also led to an improvement in operating losses.

Meanwhile, as of the end of the first quarter this year, Emart’s total assets including lease assets on a consolidated basis amounted to 20.9212 trillion KRW, down 173.6 billion KRW from the end of last year. Total liabilities increased by 119.5 billion KRW to 11.0075 trillion KRW, and total equity decreased by 293 billion KRW to 9.9137 trillion KRW.

This content was produced with the assistance of AI translation services.