Emart Q1 Operating Profit Up 245%... Emart and Traders Drive Performance

Emart, which recorded its first operating loss since its establishment last year, succeeded in a performance rebound by increasing its consolidated operating profit by 245% in the first quarter of this year.

On the 16th, Emart announced through a public disclosure that its consolidated net sales for the first quarter of this year reached KRW 7.2067 trillion, and operating profit was KRW 47.1 billion. This represents an increase of KRW 71.3 billion (1%) compared to sales of KRW 7.1354 trillion in the same period last year, and operating profit increased by KRW 33.4 billion (245%) from KRW 13.7 billion in the same period last year.

On a separate basis, it also showed solid growth. Emart recorded total sales of KRW 4.203 trillion and operating profit of KRW 93.2 billion in the first quarter of this year. This is an increase of KRW 93.1 billion (2.3%) in sales and KRW 28.9 billion (44.9%) in operating profit compared to the same period last year.

Regarding the first quarter performance, Emart explained, "Strengthening price competitiveness and increasing the number of visiting customers were the main factors for the performance improvement." Since the beginning of this year, Emart has embarked on rebuilding price leadership through the ‘Price Shock Declaration,’ offering prices at a consistently lowest level. In particular, the ‘Price Backtracking’ project, which showcased about 50 products at the lowest price level by fully utilizing distribution know-how such as direct sourcing, bulk purchasing, and collaboration with manufacturers, received a high response. Among these, about 30 key products were jointly sold with Emart Everyday, creating integrated synergy. Thanks to these efforts, Emart announced that the number of visiting customers increased by 830,000 (2.7%) compared to the same period last year.

The warehouse discount store Traders recorded sales of KRW 915.7 billion in the first quarter, up 11.9% from KRW 818.4 billion in the same period last year. Operating profit grew 313.5% to KRW 30.6 billion from KRW 7.4 billion in the same period last year. Emart stated, "Due to high inflation, customers seeking large-capacity products with lower unit prices have increased," and added, "The Traders food court ‘T Cafe,’ known as a ‘cost-effective dining hot spot’ where customers can enjoy affordable yet hearty meals, has gained popularity, leading to a sharp increase in visitors."

Specialty stores centered on No Brand recorded sales of KRW 253.5 billion in the first quarter, down 7.2% from KRW 273.1 billion in the same period last year, but operating profit increased by 42.1% to KRW 10.8 billion from KRW 7.6 billion in the same period last year.

Emart’s consolidated subsidiaries also performed relatively well. First, SCK Company (Starbucks) recorded an operating profit of KRW 32.7 billion, an increase of KRW 12.2 billion from the previous year, thanks to continuous new store openings, a decline in international coffee bean prices, and cost improvement efforts such as waste reduction.

Shinsegae Property posted an operating profit of KRW 12.2 billion, up KRW 9.3 billion from the same period last year, due to strong sales performance at major Starfield stores. Chosun Hotel & Resort recorded an operating profit of KRW 5.4 billion, an increase of KRW 1.4 billion from the same period last year, based on improved occupancy rates.

Online subsidiaries showed improvement by reducing losses. In particular, SSG.com recorded an EBITDA-based profit of KRW 5.4 billion, an increase of KRW 3.5 billion from the same period last year, driven by strong department store product sales and increased advertising revenue through diversification of advertising packages.

Emart stated, “The synergy from the integration of offline three companies’ functions is becoming full-fledged, and the online business continues to improve its structure through strengthening profitability-focused products and logistics cost efficiency,” adding, “Going forward, based on Emart’s unique sourcing know-how, we will solidify the price competitiveness of offline stores and create synergy through various online and offline collaborations to lead steady growth.”

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