Lotte Shopping net profit fell 16.4 percent on year in Q1

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Lotte Shopping net profit fell 16.4 percent on year in Q1

Published: 11 May. 2023, 18:42 Updated: 11 May. 2023, 19:03

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

Lotte Shopping’s net profit fell 16.4 percent on year to 57.8 billion won ($43.4 million), below market consensus of a 52.3 billion won net profit compiled by FnGuide.

The loss is due to a reduction in non-operating profit, which decreased 40.7 percent on year, or 7.4 billion won.

Sales fell 5.5 percent to 3.5 trillion won, below analysts’ expectations of 3.7 trillion won.

Operating profit jumped 63.7 percent to 112.5 billion won, above market expectations of 109.5 billion won.

Revitalization of global consumer spending led to profit increase in department stores, marts and e-commerce platforms, the company said.

Lotte Shopping runs various retail and entertainment brands, such as Lotte Department Store, Lotte Cinema, Lotte Mart and Lotte On.

Lotte Department Store’s sales jumped 7.09 percent to 796 billion won. Operating profit increased 21.1 percent to 131 billion won.

The department store attributed to a sales jump from growth in the fashion sectors. Overseas branch sales surged 10.5 percent to 1.4 billion won from an increase in sales from stores in Indonesia and Vietnam.

Sales of Lotte Cultureworks, which operates Lotte Cinema, jumped 54.3 percent to 11.2 billion won due to more moviegoers visiting theaters to see Japanese animated films.

Sales for the supermarket business fell 6.7 percent to 32.6 billion won. Operating profit skyrocketed 234.8 percent to 8.4 billion won.

Profit surged from cost-cutting reduction in selling, general and administrative expenses and one-off profit regarding the development of a residential and shopping center complex in Gwangju.

Sales for e-commerce business jumped 10.5 percent to 29 billion won with a 20 billion won operating loss, less than a 45 billion won operating loss in the first quarter of 2022.

Improvements in sales and operating loss were due to strengthening services related to beauty, fashion and luxury brands.

Sales for the electronics business fell 25.6 percent to 626.1 billion won, with a 26 billion won operating loss. Sales fell and loss increased as demand for home appliances fell due to a slump in the real estate market amid high interest rates.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]