Emart Q3 Operating Profit 100.7 Billion KRW...7.3%↓ "Record High Sales"(Update)

Record High Sales, 7.7074 Trillion Won with 22.1% Increase
Operating Profit of 100.7 Billion Won Consolidated, 105 Billion Won Separate Basis

[Asia Economy Reporter Yuri Kim] Emart announced that its operating profit for the third quarter of this year was 100.7 billion KRW, a 7.3% decrease compared to the same period last year. During the same period, sales increased by 22.1% to 7.7074 trillion KRW, while net profit dropped by 86.7% to 124.3 billion KRW.

Although a PPA amortization expense of 40 billion KRW due to the acquisition of shares in SCK Company and Gmarket, and a one-time cost of 35.8 billion KRW related to the Starbucks summer carry-back issue were reflected, the company was evaluated to have performed well thanks to solid growth in offline business and a significant improvement in online losses.

On a separate basis, total sales for the third quarter increased by 4.6% to 4.5365 trillion KRW, and operating profit rose by 100 million KRW to 105 billion KRW compared to the same period last year.

Looking at Emart’s business unit performance in the third quarter, discount stores expanded their growth margin with existing store sales increasing by 6.3% year-on-year. Despite increased selling and administrative expenses such as personnel costs, the gross profit margin increased by 0.7% as growth expanded.

Traders turned to a growth trend with existing store sales slightly increasing by 0.2%, despite the base effect from last year’s COVID-19 benefits. Operating profit decreased due to increased selling and administrative expenses, but the gross profit margin rose by 0.4% year-on-year.

Specialty stores recorded a profit of 5.1 billion KRW, improving by 7.5 billion KRW year-on-year through profitability-focused restructuring, further expanding the profit margin compared to the first half.

Online subsidiaries achieved significant deficit improvements based on the balanced growth strategy announced during the second quarter earnings disclosure.

SSG.com’s net sales increased by 14%, and operating losses decreased by 15.1 billion KRW to 23.1 billion KRW due to reduced discount and promotion costs and improved efficiency of the picking and packing (PP) center. W Concept’s total gross merchandise volume (GMV) for the third quarter increased by 40% to 103.5 billion KRW.

Gmarket recorded a GMV similar to the previous year and improved profitability through MD restructuring, reducing operating losses by 3.3 billion KRW from the second quarter to 14.9 billion KRW.

Offline subsidiaries continued strong performance as a result of ongoing investments. Chosun Hotel & Resort recorded an operating profit of 13.2 billion KRW, improving by 19.2 billion KRW year-on-year due to increased occupancy rates as overseas customers returned. Despite uncertain business conditions, investments continued with new business openings, achieving two consecutive quarters of profit following the first profit in two and a half years in the second quarter.

Emart24 recorded a profit of 5.7 billion KRW, an increase of 1.1 billion KRW compared to the same period last year. Cumulative profit through the third quarter reached 9.6 billion KRW, bringing it closer to achieving its first annual profit.

SCK Company recorded an operating profit of 26.6 billion KRW. This was a decrease of 59.4 billion KRW year-on-year due to one-time costs related to the carry-back recall and the base effect from last year’s strong performance of drive-thru stores. Starbucks plans to strengthen quality verification processes and establish strict internal safety standards to restore brand value going forward.

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