Net Sales of 7.5085 Trillion Won... 2.6% Decrease
Results of Intensive Profit Improvement Efforts
Main Business Mart Slightly Slows Down
Emart achieved its highest quarterly performance in over three years. However, the core large-scale supermarket segment showed somewhat sluggish results.
Emart announced on the 14th that its consolidated operating profit for the third quarter of this year was preliminarily estimated at 111.7 billion KRW, a 43.4% increase compared to the same period last year. During the same period, net sales recorded 7.5085 trillion KRW, down 2.6% year-on-year, and net income reached 105.4 billion KRW, up 423.9%. The cumulative operating profit for the third quarter of this year also increased by 222% compared to the same period last year, reaching 124.2 billion KRW. However, cumulative sales for the third quarter fell 1.6% to 21.7712 trillion KRW.
On a standalone basis excluding subsidiaries, Emart's total sales for the third quarter were 4.6726 trillion KRW, and operating profit was 122.8 billion KRW. Compared to the same period last year, sales increased by 5.3% and operating profit by 11.4%. Notably, the operating profit marked the highest quarterly performance in four years since the third quarter of 2020.
Emart analyzed that the efforts to strengthen core business competitiveness throughout this year have translated into tangible results. Utilizing 30 years of distribution know-how, including bulk purchasing of products and collaboration with major manufacturers, Emart strengthened price leadership by introducing initiatives such as the "price shock declaration" and "price reversal," offering essential daily goods at the lowest price levels to meet high customer demand. Additionally, Emart explained that continuous inflow of new customers and performance improvement were supported by spatial innovation represented by "Starfield Market Jukjeon," which infused the DNA of the mega shopping mall Starfield into Emart.
Looking at each business division, the core discount store (mart) segment showed somewhat sluggish performance. The discount store division's total sales for the third quarter were 4.6726 trillion KRW, and operating profit was 122.8 billion KRW. Compared to the same period last year, total sales decreased by 4.4% and operating profit by 3.8%. Specialty store businesses such as No Brand and Electromart also saw sales decline compared to last year. The specialty store division's total sales for the third quarter this year were 262.3 billion KRW, down 5.9% year-on-year, while operating profit increased by 1.9% to 10.9 billion KRW.
Traders posted improved results compared to last year. Traders' total sales for the third quarter were 965.2 billion KRW, and operating profit was 34.4 billion KRW. Compared to the same period last year, total sales increased by 2.3%, and operating profit rose by 30.3%. Emart Everyday, a corporate supermarket (SSM) merged with Emart this year, recorded total sales of 369.9 billion KRW and operating profit of 6.3 billion KRW.
Among major subsidiaries, e-commerce affiliates also experienced sales declines. SSG.com’s net sales for the third quarter were 390.5 billion KRW, down 9.1% from the same period last year, and Gmarket posted net sales of 225.7 billion KRW, a 19.7% decrease year-on-year. The e-commerce affiliates also continued to post losses. The third-quarter operating losses recorded by SSG.com and Gmarket were 16.5 billion KRW and 18 billion KRW, respectively. While SSG.com reduced its operating loss by 14.2 billion KRW, Gmarket’s deficit expanded by 7.9 billion KRW. Emart explained that SSG.com improved its operating loss through increased advertising revenue and cost reduction.
Offline, Shinsegae Property, which operates Starfield, saw its operating profit halved. Shinsegae Property’s third-quarter sales were 78 billion KRW, and operating profit was 4.7 billion KRW. Compared to the same period last year, sales decreased by 3.8%, and operating profit dropped by 55.7%.
Emart24 recorded net sales of 567.7 billion KRW and an operating loss of 100 million KRW in the third quarter. Although sales decreased by 5% compared to the same period last year, it succeeded in reducing operating losses by 3 billion KRW. Emart expects the profitability improvement trend of Emart24 to continue with the introduction of the "No Brand-linked convenience store model." Stores newly opened this year with No Brand showed an average daily sales more than 50% higher than stores opened last year.
SCK Company, which operates Starbucks, posted sales of 787.5 billion KRW and operating profit of 66.4 billion KRW in the third quarter. Compared to the same period last year, sales increased by 3.8%, and operating profit rose by 33.3%. Emart explained this was due to "strong sales centered on iced beverages and improved profit margins through operational efficiency."
Chosun Hotel & Resort recorded an operating profit of 19.4 billion KRW, a 30.2% increase compared to last year, and Shinsegae Food also posted an operating profit of 8.5 billion KRW, up 9% year-on-year due to management efficiency.
Emart confirmed a solid improvement trend in third-quarter performance and plans to focus on strengthening core business competitiveness to further solidify growth momentum. It will also continue efforts to improve profitability through cost reduction and enhanced investment efficiency. In particular, Emart expects that the effects of integrated purchasing and logistics center reorganization among Emart, Traders, and Everyday will begin in earnest from next year, further strengthening the profitability improvement trend. Based on this, Emart plans to introduce a new type of store specialized in grocery within the year and accelerate store renovations for spatial innovation to establish a virtuous cycle of customer inflow and sales growth.
An Emart official said, "We confirmed that securing price leadership, product innovation, and customer-centered renewal are the driving forces behind performance improvement," adding, "We will continue to promote structural reform and organizational improvement focused on the core business to enhance profitability."
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