Lotte Shopping reported a more than double increase in operating profit for the second quarter, driven by a rise in foreign tourists and strong fashion sales. The department store division alone generated nearly 120 billion won in operating profit, surpassing the company's total operating profit. However, the mart, supermarket, and e-commerce divisions continued to incur losses, and Lotte Hi-Mart's operating profit also saw a significant decline, highlighting stark differences in performance across divisions.
On August 7, Lotte Shopping announced that its consolidated operating profit for the second quarter reached 89.9 billion won, a 121.2% increase compared to the same period last year. Revenue rose by 4.0% to 3.485 trillion won, and net profit turned positive at 14.6 billion won.
The department store division was at the center of this performance improvement. Second-quarter sales for department stores reached 891.2 billion won, marking a 9.2% increase year-on-year and setting a record for the second quarter. Operating profit surged by 84% to 119.7 billion won, exceeding the total operating profit of Lotte Shopping.
Domestic department store sales increased by 8.8% to 855.6 billion won, with operating profit jumping 77.6% to 112.3 billion won. The growth was attributed to increased sales from foreign tourists and strong performance in fashion merchandise.
The growth of overseas department stores was even more pronounced. Second-quarter sales for overseas department stores reached 35.6 billion won, a 20.6% increase from the previous year, while operating profit skyrocketed by 309.7% to 7.4 billion won. Lotte Mall Westlake Hanoi achieved record operating profit for six consecutive quarters, driving overseas performance.
The strong performance of department stores continued from the first quarter. In the first quarter, Lotte Shopping's department store sales rose by 8.2% to 872.3 billion won, while total operating profit increased by 70.6% to 252.9 billion won, exceeding market expectations by about 22%. Analysts have identified the expansion of foreign sales and the simultaneous growth of luxury and domestic fashion as key drivers of Lotte Shopping's performance this year.
In contrast, the mart division has yet to recover from losses. Second-quarter sales for the mart division increased by 2.6% to 1.3295 trillion won, but it recorded an operating loss of 37.8 billion won. Domestic mart sales rose by 3.5% to 978.9 billion won, with an operating loss of 42.2 billion won. Overseas mart sales reached 350.6 billion won, with an operating profit of 4.3 billion won, down 51.5% from the previous year.
The supermarket division also saw a slight increase in net sales to 313.0 billion won, but continued to incur an operating loss of 1.8 billion won. E-commerce sales decreased by 1.5% to 26.2 billion won, resulting in an operating loss of 7.4 billion won, although the scale of the e-commerce loss was smaller than last year.
Lotte Hi-Mart reported second-quarter sales of 591.1 billion won, a 0.5% decrease from the previous year. Operating profit plummeted by 90.7% to 1.0 billion won. The increase in profits from department stores partially offset the losses from the mart, supermarket, and e-commerce divisions, as well as the decline in Hi-Mart's profits.
Lotte Shopping noted that while there were temporary costs, overall profitability improved due to a restructuring of its high-margin product portfolio in home shopping and enhanced efficiency in selling and administrative expenses.
For the first half of the year, Lotte Shopping recorded cumulative sales of 7.066 trillion won and operating profit of 342.8 billion won, representing increases of 3.8% and 81.5%, respectively, compared to the same period last year. Net profit surged by 1,932.9% to 158.5 billion won.
In the first half, department store sales reached 1.7635 trillion won, up 8.7%, while operating profit increased by 59.4% to 310.9 billion won. Domestic department store operating profit rose by 54.8% to 295.9 billion won, and overseas department store operating profit soared by 287.8% to 15.0 billion won.
Im Jae-cheol, head of Lotte Shopping's finance division, stated, “The solid performance of domestic and overseas department stores, combined with efforts to improve overall profitability, has led to a significant rebound in results for both the second quarter and the first half. We will continue to strengthen the core competitiveness of our key businesses and pursue stable growth through ongoing improvements.”
* This article has been translated by AI.
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