Lotte Shopping posted an earnings surprise in the first quarter, driven by record quarterly results from its department store division.
Lotte Shopping said Tuesday that its first-quarter operating profit on a consolidated basis reached 252.9 billion won, up 70.6 percent from a year earlier, according to a regulatory filing. The figure exceeded the market consensus of 207.5 billion won by about 22 percent. Revenue rose 3.6 percent to 3.58 trillion won over the same period, while net profit surged 694 percent to 143.9 billion won.
The department store division led the earnings surprise. Its revenue climbed 8.2 percent year-on-year to 872.3 billion won, while operating profit jumped 47.1 percent to 191.2 billion won, supported by strong sales of high-margin fashion products. Both figures mark record highs for a first quarter. Bolstered by stronger foot traffic at major stores including the main branch, Jamsil, and Busan, along with robust demand from foreign tourists, same-store sales growth reached 13 percent. Foreign customer sales in particular surged 92 percent.
Overseas operations also showed notable growth. Lotte Mall West Lake Hanoi in Vietnam posted a record quarterly operating profit of 4.9 billion won. By region, sales in Vietnam and Indonesia rose 28 percent and 7 percent, respectively, with total sales growing across all stores. As a result, overseas revenue rose 14.7 percent year-on-year to 35.5 billion won, while operating profit surged 268.7 percent to 7.6 billion won, contributing to the improvement in overall profitability.
The mart division posted first-quarter revenue of 1.53 trillion won and operating profit of 33.8 billion won, up 2.6 percent and 20.2 percent from a year earlier, respectively. Overseas operations were credited with defending earnings amid a slowing market. Operating profit from the domestic mart business came in at 8.8 billion won, a 30.9 percent increase year-on-year. Overseas, Vietnam stood out, recording revenue of 485 billion won and operating profit of 25 billion won, up 3.4 percent and 16.8 percent, respectively, with broad-based sales growth across all product categories. The company said 18 percent growth in the Vietnamese market drove the overall improvement in overseas earnings.
Lotte Cultureworks returned to profit with operating profit of 7.9 billion won, supported by the recovery of the domestic cinema business. However, other affiliates including the e-commerce division and Lotte Hi-Mart posted weak results. The e-commerce division recorded an operating loss of 5.8 billion won, while Lotte Hi-Mart's operating loss widened to 14.7 billion won. Lotte Hi-Mart's profit decline was attributed to sustained fixed-cost pressures as revenue fell amid a slump in the domestic home appliance market and a drop in new housing move-ins.
"In the first quarter, we achieved remarkable results based on the department store's solid performance and improved profitability at our subsidiaries," said Lim Jae-cheol, head of finance at Lotte Shopping. "We will continue to strengthen the fundamental competitiveness of our domestic business and solidify sustainable growth engines through the expansion of overseas operations."
