Lotte GRS, the operator of Korea's Lotteria burger chain, has recovered annual revenue of 1 trillion won for the first time in eight years, staging a successful earnings turnaround. The rebound came from improved profitability in domestic operations combined with overseas expansion into Southeast Asia and the United States. Mom's Touch, another major Korean burger brand, also recorded double-digit growth as it accelerates its push into global markets.
According to a regulatory filing with the Financial Supervisory Service (FSS) on Monday, Lotte GRS posted consolidated revenue of 1.1189 trillion won ($826 million) last year, re-entering the "1 trillion won revenue club." The last time Lotte GRS achieved 1 trillion won in revenue was in 2017. During the COVID-19 pandemic, the entire dining-out industry took a hit, and the company's revenue plunged to 683.1 billion won in 2020. Operating profit also jumped 30.6% year-on-year to 51 billion won last year, marking a significant improvement in profitability.
Lotte GRS attributed the strong results to a sharp increase in per-store sales across its franchise brands, including Lotteria, Angel-in-us Coffee and Krispy Kreme Doughnuts. For Lotteria, hit new menu items drove the earnings improvement. The "Whole Leg Crispy Chicken Burger" far exceeded its initial sales target after launch, surpassing 1 million units sold within just two weeks. Angel-in-us Coffee boosted efficiency through profitability-focused store operations, and Krispy Kreme Doughnuts contributed to the earnings improvement by expanding its sales channels.
Improvements in cost structure also underpinned the earnings turnaround. Lotte GRS relocated underperforming stores, restructured lease agreements and reduced rental and commission expenses. The company also fully repaid short-term borrowings and improved its financial structure, lowering both its debt ratio and borrowing dependency. The debt-to-equity ratio fell from 311% the previous year to 254% last year, while borrowing dependency dropped from 29% to 20%. Industry observers noted that the cash-generating capacity secured through the improved earnings has laid the groundwork for future investment.
Lotteria is strengthening its Southeast Asian market strategy with Vietnam as a key hub, expanding into Myanmar and Laos. After opening its first U.S. store in August last year, the chain opened its first Malaysia location in December and its first Singapore store in February this year. Additional U.S. locations are also under review.
Mom's Touch is also accelerating its overseas market push. On the 3rd of this month, the company entered the Laotian market by opening its first store in the capital Vientiane. It plans to expand to six stores within the year, leveraging the distribution network of its master franchise partner, Kolao Group.
Building on its established presence in Mongolia, Thailand and Japan, Mom's Touch is seeing rapid revenue growth. The company posted consolidated revenue of 479 billion won and operating profit of 89.7 billion won last year, up 14.6% and 22.2% year-on-year respectively. The company sustained double-digit growth for the second consecutive year. Point-of-sale revenue from approximately 1,490 stores nationwide reached 1.0058 trillion won last year, surpassing the 1 trillion won mark for the first time. KL&Partners, the private equity fund manager and largest shareholder of Mom's Touch, is pursuing a sale of its controlling stake for the first time in four years since 2022.
Industry observers see major burger brands seeking growth engines overseas as competition intensifies in the domestic market. The spread of Korean content, or K-content, has heightened interest in Korean-style menu items, and "K-burger" is establishing itself as a new export category, they said. "We will strengthen profitability in domestic operations while building a stable growth structure through global market expansion," a Lotte GRS official said.
