"Increase in Marketing Expenses" HiteJinro, 1Q Operating Profit Down 33.4%

HiteJinro announced on the 12th that its consolidated operating profit for the first quarter of this year was tentatively estimated at 38.7 billion KRW, a 33.4% decrease compared to the same period last year. Sales revenue increased by 3.4% year-on-year to 603.5 billion KRW, while net profit dropped by 40.7% to 22 billion KRW.

The decline in HiteJinro's first-quarter profits is attributed to increased promotional expenses amid a sluggish market caused by a recent economic downturn and weakened alcohol consumption. In particular, the main factor is considered to be the pre-expenditure on inventory adjustments and related marketing costs ahead of the launch of the new beer product 'Kelly' last month. Additionally, changes in drinking culture and a slower-than-expected recovery in demand for beer and soju despite the transition to the endemic phase of COVID-19 have also had an impact.

HiteJinro launched its new beer, Kelly, on the 4th of last month. Kelly is the first beer brand introduced by HiteJinro in four years since 'Terra' in 2019. To ensure a smooth market entry for Kelly, HiteJinro is deploying strong sales efforts from the initial launch, betting on its success. Since early diffusion is crucial for new products, the company’s strategy is to rapidly increase product awareness through various sales activities.