Department Stores, Marts, and E-commerce Lead
Hi-Mart and Home Shopping Show Some Sluggishness
Lotte Shopping has significantly improved its operating profit in the first quarter of this year despite the contraction in consumer spending.
Lotte Shopping announced on the 11th that its operating profit for the first quarter of this year reached 112.5 billion KRW, a 63.7% increase compared to the same period last year. During the same period, sales decreased by 5.5% to 3.5616 trillion KRW. Net profit for the period was 57.8 billion KRW, down 16.4% from the same period last year.
Looking at each business division, the department store segment increased both sales and operating profit. First quarter sales grew 7% to 796 billion KRW, and operating profit rose 21.1% to 131 billion KRW. The company attributed this to increased sales of fashion products driven by the revitalization of offline consumption and a 10.5% increase in overseas store sales due to the transition to a COVID-19 endemic phase in Southeast Asia.
In the case of marts and supermarkets, sales slightly declined due to consumption slowdown amid high inflation, but operating profit increased significantly thanks to structural improvements. First quarter sales for marts and supermarkets decreased by 2.4% and 6.7%, respectively, while operating profit increased by 91.8% and 234.8%, respectively.
E-commerce has also seen results from profitability improvement efforts focused on since last year. First quarter sales increased by 10.5%, and operating losses have decreased for three consecutive quarters. Culture Works saw a 54.3% increase in sales due to the success of Japanese animations such as "The First Slam Dunk," which boosted movie theater attendance, and reduced its deficit by 18.4 billion KRW.
Hi-Mart experienced a 25.6% drop in sales and an expanded deficit due to the real estate market downturn caused by interest rate hikes. Home shopping sales fell 16%, and operating profit dropped 87.6% after early morning broadcasts were suspended from February due to violations of the Broadcasting Act.
A Lotte Shopping official said, "We place significance on the improvement in sales and operating profit centered on shopping divisions such as department stores, marts, and e-commerce," adding, "This year, we will strive to improve performance through the successful opening of Hanoi Lotte Mall West Lake and efforts to strengthen domestic business fundamentals."
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