Record High Sales at Emart: "This Year, We Focus on Strengthening Fundamentals"

Last Year's Annual Sales 29.3335 Trillion KRW... Expected to Surpass 30 Trillion KRW This Year
Operating Profit Down 54.2%... Impact of Starbucks Refunds and Gmarket Acquisition

Emart continued its record-high sales last year. While the mart sales showed a solid performance, its online and offline affiliates also demonstrated balanced growth. However, operating profit dropped by more than 50% due to increased cost burdens from the Starbucks carry bag refund and the acquisition of Gmarket. As the company steadily expands its scale, improving profitability is expected to be Emart's key task this year.

According to the distribution industry on the 15th, Emart recorded consolidated sales of 29.3335 trillion KRW last year. This figure represents a 17.7% increase compared to 2021, marking the highest ever. Strong performance in its core mart business led the sales growth. Emart's existing stores saw a 7.8% increase in sales in the fourth quarter compared to the previous year, continuing a growth streak for 10 consecutive quarters, and the number of customers in the fourth quarter rose by 4.3%, marking an increase for two consecutive quarters. Seo Jeong-yeon, a researcher at Shin Young Securities, evaluated, "In a domestic and international environment burdened by inflation, Emart's sourcing, quality control, and price competitiveness in essential consumer goods, led by fresh food, have been demonstrated as strengths."

Online subsidiaries also improved profitability. SSG.com and Gmarket reduced their deficits, with SSG.com's fourth-quarter net sales increasing by 8.3% year-on-year to 455.9 billion KRW, and operating losses narrowing to 21.9 billion KRW compared to the same period last year. Gmarket's operating loss for the same period was 13 billion KRW, reducing the deficit by 1.9 billion KRW from the previous quarter. W Concept's fourth-quarter gross merchandise volume (GMV) increased by 28% year-on-year to 155.3 billion KRW, recording an annual profit of 3.2 billion KRW.

Emart24 and Chosun Hotel also raised expectations by achieving annual profits. Emart24 recorded its first-ever annual operating profit of 6.8 billion KRW last year, an increase of 10.3 billion KRW compared to the year before last. The number of stores increased by 76 from the previous quarter to a total of 6,365 stores. Chosun Hotel & Resort achieved an annual operating profit of 22.2 billion KRW last year, marking its first annual profit in nine years since 2013, as a result of aggressive investment and expansion during the COVID-19 period.

Although sales approached 30 trillion KRW, operating profit fell by more than 50%. Emart's operating profit last year was 145.1 billion KRW, down 54.2% from the previous year. First, the Starbucks summer carry bag carcinogen detection incident last year led to refund costs due to recalls, and record-high exchange rates worsened profitability. Most notably, amortization expenses arose from the acquisition of Gmarket Global and additional acquisition of shares in SCK Company (formerly Starbucks Korea), which impacted the results.

Despite the damage to operating profit due to subsidiary cost issues, the company plans to focus on improving profitability this year as it continues to expand its scale. Emart aims for "profitability-centered management for sustainable growth" this year and plans to promote balanced growth of its online and offline businesses. Offline will secure a foundation for future growth through cost structure innovation, strengthening products and core competitiveness, and improving investment efficiency, while online will reorganize its portfolio to strengthen expertise suitable for each business area and secure competitiveness.

Sales growth is also expected to continue, with sales projected to surpass 30 trillion KRW for the first time. Emart announced yesterday that it expects sales this year to reach 31.29 trillion KRW, a 6.7% increase from last year. Financial information firm FnGuide also estimates this year's sales at 31.0919 trillion KRW, a 5.9% increase from last year, and operating profit at 357.7 billion KRW, a 96.1% increase.

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