Department Store F/W Sales Slump and SG&A Expense Increase Impact
Mart and Supermarket Benefit from Integrated Product Sourcing... Operating Profit Growth
Lotte Shopping announced on the 9th that its operating profit for the third quarter of this year was 142 billion KRW, a 5.3% decrease compared to the same period last year. During the same period, sales amounted to 3.7391 trillion KRW, down 6.8%. Net profit turned positive at 61.8 billion KRW.
On a cumulative basis from the first to the third quarter of this year, operating profit increased by 4.4% year-on-year to 306 billion KRW. Sales decreased by 6.5% to 10.923 trillion KRW. Net profit surged by 1112.9% to 236.1 billion KRW.
As high interest rates and inflation trends prolonged, significantly weakening household consumption sentiment, profitability improvement efforts carried out at Lotte Mart, Super, e-commerce, and Hi-Mart showed results.
In the third quarter, Lotte Mart and Super saw a significant increase in operating profit due to an increase in gross profit margin from integrated product sourcing and efforts to reduce selling and administrative expenses. E-commerce improved both sales and operating profit through the stabilization of Lotte On vertical services, and Hi-Mart greatly improved operating profit by normalizing inventory and expanding the proportion of high-margin product sales.
Department stores experienced a decline in operating profit due to sluggish sales of fall/winter (F/W) products caused by higher-than-average temperatures and increased selling and administrative expenses amid ongoing inflation trends. Home shopping and Culture Works, industries currently in recession, saw decreases in both sales and operating profit.
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