Lotte Hi-Mart 1Q Loss Widens... "Impact of Decreased Moving and Wedding Purchases" (Comprehensive)

Q1 Operating Loss of 25.8 Billion KRW, Sales of 626 Billion KRW
Impact of Consumer Slump and Decrease in Wedding Expenses
Profitability Improved Through Intensive Structural Reform Efforts

Lotte Hi-Mart recorded an operating loss of 25.805 billion KRW in the first quarter of this year due to consumption stagnation caused by high inflation and high interest rates, as well as a decrease in moving and wedding-related purchases, widening its deficit.

Lotte Hi-Mart announced on the 4th that its consolidated operating loss for the first quarter of this year was 25.8 billion KRW, an increase in deficit compared to last year (operating loss of 8.2 billion KRW). During the same period, sales amounted to 626.1 billion KRW, down 25.6% from the previous year. The performance slowed due to continued consumption stagnation and a decline in moving and wedding-related purchases, and one-time costs for inventory normalization also contributed to the increased operating loss.

Lotte Hi-Mart will undertake a high-intensity structural improvement by consolidating inefficient stores into large regional stores. It will also strengthen the competitiveness of existing stores through expanding the proportion of new products, enhancing the product lineup, and improving customized MD according to commercial districts. Centered on this, the company plans to revamp the MD of about 100 stores by the end of next year.

In addition, Lotte Hi-Mart will collaborate with Lotte ON to completely reorganize its online mall and reestablish the direction of its overall online business, including marketing, products, inventory, and systems. It will continue to promote logistics network efficiency by analyzing the operational efficiency, costs, and processes of each logistics center. Lotte Hi-Mart stated, "As a result of advancing the product management system, such as assigning product grade systems reflecting sales trends, inventory value in the first quarter of this year decreased by approximately 115 billion KRW compared to the previous year," adding, "We will enhance profitability and strengthen our business model through comprehensive structural improvements."