Lotte Shopping Q1 Operating Profit 61.8 Billion KRW... Up 18.5% YoY (Comprehensive)

[Asia Economy Reporter Lim Chunhan] Lotte Shopping announced on the 10th that its consolidated operating profit for the first quarter of this year was preliminarily estimated at 61.8 billion KRW, an increase of 18.5% compared to the same period last year.

Sales decreased by 4.8% to 3.88 trillion KRW. Net loss narrowed to 40.6 billion KRW from 43.3 billion KRW in the first quarter of last year. Excluding one-time expenses of 43.2 billion KRW, including acquisition tax of 40 billion KRW incurred due to Lotte REITs additionally incorporating some department stores, outlets, and mart stores as assets, operating profit increased by 101.5% to 105 billion KRW.

Performance varied by business segment in the first quarter. Department store sales rose 11.5% to 676 billion KRW, and operating profit increased 261.3% to 103 billion KRW. The supermarket segment, which posted an operating loss of 6 billion KRW in the first quarter of last year, turned profitable with a 3 billion KRW operating profit this year, thanks to cost reduction effects from restructuring. The electronics specialty store (Hi-Mart) saw sales increase by 3.3% to 956 billion KRW and operating profit rise 31.8% to 26 billion KRW, driven by expanded demand for premium home appliances centered on large appliances.

On the other hand, discount store (mart) sales fell 10% to 1.476 trillion KRW, and operating profit dropped 93.4% to 1 billion KRW. This was due to the absorption and integration of the Health & Beauty (H&B) store division, LOBs, in January, reflecting LOBs’ performance. Home shopping sales decreased 4.3% to 258 billion KRW, and operating profit declined 6.3% to 34 billion KRW, due to a reduced proportion of high-margin products such as health foods and beauty items, and increased selling and administrative expenses. Culture Works, the investment and distribution company operating Lotte Cinema, posted an operating loss of 40 billion KRW due to sluggish cinema and content business caused by a decline in domestic movie theater attendance.

The e-commerce division, represented by Lotte ON, saw sales drop 41.9% to 28 billion KRW, and operating loss nearly doubled to 29 billion KRW. This was analyzed to be due to reduced commission revenue following Lotte ON’s launch as an open market in April last year, and increased selling and administrative expenses for expanding scale.

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