Department Stores Pull, Hypermarkets Push... Lotte Shopping's Q3 Operating Profit Up 34.5%

Department Stores and Hypermarkets Add Nearly KRW 40 Billion in Operating Profit, Driving Profitability Improvements
Operating Profit at Lotte Hi-Mart Falls 70%; E-Commerce Losses Continue

Lotte Shopping achieved both top-line growth and improved profitability in the third quarter of this year, driven by strong performances at its department stores and hypermarkets. Revenue rose 7%, while operating profit increased by more than 34%. However, the pace of improvement varied across business segments, as profits at Lotte Hi-Mart declined and e-commerce continued to post losses.

According to Lotte Shopping on Friday, consolidated revenue in the third quarter of this year rose 7.1% year on year to KRW 3.6532 trillion. Operating profit increased 34.5% to KRW 175.6 billion, while net income turned positive at KRW 142.4 billion. The operating margin rose by about 1 percentage point, from 3.8% in the third quarter of last year to 4.8% this year.

Department stores led the improvement. The department store business recorded gross sales of KRW 2.0397 trillion in the third quarter, its highest-ever third-quarter figure. Net sales rose 5.7% to KRW 808.1 billion, and operating profit increased 35.7% to KRW 112.9 billion. This means department stores accounted for about 64% of consolidated operating profit.

Hypermarkets also contributed to the improved results. Third-quarter revenue increased 9.7% to KRW 1.4626 trillion, while operating profit rose 87.5% to KRW 21.6 billion. The increase in same-store sales was driven by a base effect related to consumption coupons, differences in the timing of Chuseok, and easing competition. However, the operating margin remained at about 1.5%, so it remains to be seen whether profitability will continue to improve.

The combined increase in operating profit at the department stores and hypermarkets amounted to about KRW 39.8 billion. Compared with the KRW 45.1 billion increase in Lotte Shopping's total consolidated operating profit over the same period, that represents about 88%. The two business segments effectively drove the company's overall profit growth.

By contrast, results at the other business segments were mixed. Operating profit rose 27.6% at home shopping and 77.9% at Lotte Cultureworks, but fell 70.6% at Lotte Hi-Mart to KRW 5.6 billion. E-commerce also narrowed its losses, but recorded an operating loss of KRW 7.2 billion.

Lotte Shopping's cumulative operating profit for the first nine months of the year rose 62.3% year on year to KRW 518.4 billion.

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