Lotte Shopping reports 69 billion won first quarter net profit

Lotte Department Store's branch in Jung District, central Seoul. [LOTTE DEPARTMENT STORE]

Lotte Shopping reported a net profit of 69.1 billion won ($54.2 million) in the first quarter, beating market expectations of 37.9 billion won, as shopping rebounded with the end of social distancing regulations.

In the year earlier period, the company lost 40.6 billion won on a net basis.

Revenue fell 2.8 percent on year in the first quarter to 3.77 trillion won, lower than the market consensus of 3.9 trillion won.

The company said profit rose as footfalls increased at Lotte Department Store branches with the easing of rules. Department stores sales in Korea rose 9.8 percent on year to 726 billion won.

Overseas branch sales fell 5.5 percent to 14 billion won with the decline mainly due to a drop in Chinese business. China sales fell 15.3 percent to 6 billion won due to the spread of Covid-19.

Sales of Lotte Cultureworks, which operates Lotte Cinema, rose 79.5 percent on year to 73 billion won as moviegoers returned to the theaters.

Lotte Mart reported revenue of 1.48 trillion won, up 0.4 percent on year. It said liquor sales grew the most, rising 12.9 percent on year as the company opened Bottle Bunker wine shops at some Lotte Mart branches, such as the Zettaplex branch in Jamsil, southern Seoul.

E-commerce business revenue fell 4.1 percent on year to 26 billion won. The company said the division's revenue dropped because since last August, Lotte Mart and Lotte Department Store products sold on Lotte On e-commerce website have been counted as sales of the department store and the discount mart, rather than Lotte On's.

Lotte Shopping said monthly active users on Lotte On rose 42.4 percent on year to 27.9 million. Those who made purchases rose 25.7 percent to 1.42 million.

"First quarter earnings are significant because they show our department stores and discount marts are rebounding from the pandemic," said Choi Young-joon, head of Lotte Shopping's finance division. "Rising demand as the world reopens from the pandemic will be what drives up Lotte Shopping's profits."

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]