Lotte Department Store's flagship location in Jung-gu, Seoul [Lotte Department Store]
Lotte Department Store's flagship location in Jung-gu, Seoul [Lotte Department Store]

Lotte Shopping posted a more-than-twofold increase in operating profit in the second quarter and swung to a net profit for the period, marking a sharp improvement in earnings. Its department store division set an all-time sales record, driving company-wide growth. The mart segment also contributed, with higher sales and a narrower operating loss.

Lotte Shopping said Friday that its consolidated operating profit for the second quarter rose 121.2 percent year on year to 89.9 billion won ($63.1 million), based on preliminary results. Sales for the same period grew 4.0 percent to 3.48 trillion won. Net profit for the period came in at 14.6 billion won, reversing a loss from a year earlier.

The department store division was the standout performer. Sales from foreign visitors climbed, and fashion-led demand was strong across all product categories. The division's sales rose 9.2 percent year on year to 891.2 billion won — an all-time high for a second quarter — while operating profit jumped 84.0 percent to 119.7 billion won. Domestic operating profit surged 77.6 percent and overseas profit soared 309.7 percent. Lotte Mall West Lake Hanoi extended its run of record quarterly operating profit to six consecutive quarters.

The mart segment posted sales of 1.33 trillion won, up 2.6 percent from a year earlier. Despite one-time costs including voluntary retirement payouts, the operating loss narrowed to 37.8 billion won. Domestic mart sales in particular rose 3.5 percent year on year to 978.9 billion won, supported by easing competition in the market and stronger product competitiveness centered on private-label brands.

The home shopping unit recorded sales of 238.6 billion won and operating profit of 19.9 billion won, up 3.3 percent and 62.7 percent, respectively, from a year earlier, driven by a portfolio shift toward higher-margin products and tighter selling, general and administrative expense controls. The e-commerce segment also narrowed its operating loss to 7.4 billion won, contributing to company-wide profitability. Hi-Mart and Cultureworks plan to pursue a full turnaround in the second half through structural improvements.

For the first half, cumulative sales rose 3.8 percent year on year to 7.07 trillion won, while operating profit climbed 81.5 percent to 342.8 billion won. Net profit for the period reached 158.5 billion won, a year-on-year increase of 1,932.9 percent.

"The solid performance of the department store division, combined with company-wide efforts to improve profitability, produced a meaningful earnings rebound," said Lim Jae-cheol, head of Lotte Shopping's finance division. "We will continue to strengthen the core competitiveness of our key businesses and pursue ongoing structural improvements to sustain stable growth."


spa@heraldcorp.com