Lotte Himart Reports Q3 Operating Profit of 19 Billion Won...Profitability Improves for Third Consecutive Quarter

Q3 Operating Profit at 19 Billion Won, Down 39.3% Year-on-Year
Operating Profit Up 10.1 Billion Won Excluding One-Off Factors
"Profitability Improvement Trend Continues"

On October 31, Lotte Himart announced that its operating profit for the third quarter of this year was 19 billion won, a 39.3% decrease compared to the same period last year. This was attributed to a base effect resulting from large-scale one-off factors such as last year's value-added tax refunds.

During the same period, sales amounted to 652.5 billion won, a 4.9% decrease year-on-year. The company explained that excluding one-off factors, third-quarter sales decreased by 0.9% compared to last year, and cumulative sales for the year increased by 0.1%, remaining at a similar level to the previous year. Operating profit, excluding one-off factors, increased by 10.1 billion won in the third quarter year-on-year, and by 24.4 billion won on a cumulative basis, indicating an actual improvement in performance.

Cumulative operating profit for the first to third quarters of this year was 18.4 billion won, a 2.2% increase compared to the previous year. During the same period, sales reached 1.7757 trillion won, a 1.4% decrease year-on-year. The total transaction amount, which refers to the sum of all payments made by customers at Himart, was 798.2 billion won in the third quarter of this year, a 0.5% increase from the previous year.

Himart Safety Care Sales Up 44% Year-on-Year..."Continuous Strengthening of Four Core Strategies"

Lotte Himart Headquarters Building. Provided by Lotte Himart

Previously, on November 1 last year, Lotte Himart announced its 'Value-Up' plan, disclosing its financial goals and shareholder return plans through 2029. The company aims to achieve sales of over 2.8 trillion won and operating profit of over 100 billion won by 2029. In February of this year, it also set targets of 2.3 trillion won in sales and 10 billion won in operating profit for 2025, alongside its 2024 annual results announcement.

To achieve these goals, the company is pursuing four core business strategies: ▲Himart Safety Care ▲Everyday Home Appliance Private Brand PLUX ▲Store Format Innovation ▲E-commerce. Himart Safety Care sales increased by 44% year-on-year on a cumulative basis (January to September), while private brand sales rose by 6.4% year-on-year, thanks to the launch of the new brand 'PLUX' in April. The 18 stores that underwent renewal this year saw a 44% year-on-year increase in cumulative sales, and e-commerce sales also grew by 9% year-on-year on a cumulative basis.

Lotte Himart plans to continue strengthening its core strategies going forward. First, Himart Safety Care is making various attempts, such as expanding its service areas. In June, the company launched the 'Pre-Installation Inspection Service' to prevent trial and error in the installation of large appliances, as well as the 'Appliance Inconvenience Inspection Service' to resolve inconveniences that may arise during appliance use. In July, it introduced the 'Apple Performance Pre-Diagnosis Service' using a 'Pre-Diagnosis Solution,' establishing infrastructure that allows customers to receive Apple services at stores nearly every day of the year.

'PLUX', Himart's Private Brand...Increase in New Customers in Their 20s and 30s

The newly launched private brand 'PLUX' in April has shown steady growth since its debut. Products such as the '330-liter refrigerator,' '43-inch QLED portable TV,' and 'foldable hair dryer' have each ranked first in sales within their respective categories since launch. The proportion of new customers in their 20s and 30s has also increased, demonstrating positive results. Lotte Himart plans to introduce about 20 new products based on customer inconvenience data within the year, including a 'custom keyboard' scheduled for release next month.

The company will further expand its experience-oriented renewal stores. This year, it has been establishing a system to provide specialized consulting on interior spaces within customers' homes. In July, it introduced the 'Built-in Planner Solution,' which can create a 3D rendering of a customer's space using only their address information and provide customized consulting on appliances, furniture, and interior products. Through this, the company expects to resolve up to 5,000 installation inconveniences annually. In addition, it will continue to introduce 'Total House Care' stores, where customers can experience various durable equipment such as sinks, faucets, sliding doors, lighting, and washbasins alongside appliances.

The company is also striving to provide a consistent shopping experience across all offline and online channels. After launching the 'Himart Safety Care Service' online, which was first introduced offline, online sales saw significant growth. The 'Himart Subscription' service, which was introduced in May, is also planned to launch online within the year. In particular, by leveraging the synergy with 'offline professional consultants,' the company aims to resolve online customer inconveniences through offline experts and guide offline store visitors to newly install the online app.

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