Lotte Shopping Q3 sales reach 3.65 trillion won, operating profit 175.6 billion won

Operating profit up 34%, net profit for the period turns to black

Department store leads gains; mart and home shopping also expand profits

Lotte Department Store's main branch [Lotte Department Store]
Lotte Department Store's main branch [Lotte Department Store]

Lotte Shopping posted growth in both sales and operating profit in the third quarter, with its flagship department store business hitting an all-time high in sales and every division contributing to the gains.

Lotte Shopping said Friday its consolidated sales reached 3.65 trillion won ($2.72 billion) in the third quarter, up 7.1 percent from a year earlier, while operating profit rose 34.5 percent to 175.6 billion won. Net profit for the period came in at 142.4 billion won, swinging to a profit from a loss in the same period last year.

Cumulative sales for the first three quarters reached 10.72 trillion won, a 4.9 percent increase year on year, while operating profit jumped 62.3 percent to 518.4 billion won. Cumulative net profit for the period stood at 300.9 billion won, also turning to a profit from a year-earlier loss. The results raised market expectations that the company will again reach its annual sales target of 14 trillion won this year.

The department store division again served as the company's anchor, driving the strong quarterly performance. Department store sales rose 5.7 percent year on year to 808.1 billion won — an all-time quarterly record — buoyed by strong results at flagship locations including the main branch, the Jamsil branch, the Busan main branch and the Incheon branch, as well as a surge in shopping demand from foreign tourists. Operating profit grew 35.7 percent to 112.9 billion won, as steady growth across all product categories — particularly high-margin fashion — fed through to improved profitability.

The department store division also posted record results overseas, in markets including Vietnam and Indonesia. Overseas sales climbed 14.8 percent year on year to 35 billion won, while operating profit nearly doubled, jumping 99.2 percent to 7.1 billion won. Lotte Mall West Lake Hanoi in Vietnam set a milestone by becoming the first Korean department store operating abroad to surpass cumulative sales of 1 trillion won, just three years after opening.

The mart division also improved its performance. Sales rose 9.7 percent to 1.46 trillion won, and operating profit jumped 87.5 percent to 21.6 billion won, aided by favorable conditions including a base effect from consumer vouchers in the prior year and a shift in the timing of the holiday season. The division defended its profitability despite initial costs associated with the opening of new Zeta Smart Center locations. The supermarket division also grew, with sales and operating profit up 6.7 percent and 16.2 percent, respectively.

Other subsidiaries also contributed to the company's overall results. Home shopping posted third-quarter sales of 226.8 billion won, up 7.3 percent, with operating profit rising 27.6 percent to 13.1 billion won. Cultureworks recorded double-digit growth in both sales, up 14.5 percent, and operating profit, up 77.9 percent, on the back of increased moviegoers drawn by hit foreign films. Lotte On, the e-commerce unit, grew sales 18.4 percent to 26.7 billion won as transaction volume expanded, while narrowing its operating loss to 7.2 billion won. Himart maintained sales roughly flat at 654.5 billion won year on year, though operating profit fell 70.6 percent to 5.6 billion won.

"Solid performance from domestic and overseas department stores, a recovery in profitability at key divisions including the mart, and structural improvements at subsidiaries combined to deliver meaningful top-line growth and profit gains in the third quarter," said Lim Jae-cheol, chief financial officer of Lotte Shopping. "We will continue to strengthen the core competitiveness of our key businesses and pursue ongoing structural improvements to sustain stable growth."

Lotte Shopping logo [Lotte Shopping]
Lotte Shopping logo [Lotte Shopping]

spa@heraldcorp.com