Consolidated Operating Profit Reaches 159.3 Billion Won
Highest First-Quarter Performance Since 2017
Discount Stores and Traders Lead the Rebound
Expanded Discounts and Profit-Focused Strategy Drive Results
Major Subsidiaries Also Improve Profitability
Emart overcame sluggish domestic demand to achieve an earnings surprise in the first quarter of this year. By focusing on price discounts and strengthening product competitiveness in line with Chairman Chung Yongjin's management policy of enhancing core business competitiveness, the company improved profitability in its main businesses, such as hypermarkets and warehouse clubs, recording its highest performance in eight years.
On May 12, Emart announced in a regulatory filing that its consolidated operating profit for the first quarter was provisionally calculated at 159.3 billion won, a 238.2% increase compared to the same period last year. This marks the highest first-quarter result in eight years since 2017 and, on a quarterly basis, the best performance in 26 quarters since the third quarter of 2018. Revenue rose by 0.2% year-on-year to 7.2189 trillion won, while net profit increased by 184.6% to 83.6 billion won.
On a standalone basis, Emart's revenue was 4.6258 trillion won and operating profit was 133.3 billion won, up 10.1% and 43.1%, respectively, from the same period last year. Standalone operating profit was the highest for a first quarter in seven years since 2018. This includes 356.4 billion won in revenue and 5.5 billion won in operating profit from Emart Everyday, the supermarket subsidiary merged in July last year.
By business segment, revenue from the discount store division (hypermarkets) increased by 0.3% year-on-year to 816.2 billion won, while operating profit surged by 53.7% to 77.8 billion won. The "Price Shock Declaration," which has provided key daily necessities at consistently lowest prices since last year, along with the "Goraeit Festa" discount promotion launched in January this year, contributed to improved profitability.
Emart's space innovation strategy, exemplified by Starfield Market, also led to increased customer traffic and improved performance. In the first quarter of this year, revenue at Starfield Market Jukjeon rose by about 21% year-on-year, while sales at Munhyeon, Yongsan, and Mokdong locations increased by 35%, 11%, and 6%, respectively. The number of customers at discount stores in the first quarter grew by 2% compared to the same period last year.
An Emart representative stated, "Since last year, we have established an integrated purchasing system and focused on strengthening product competitiveness and reducing costs based on this system," adding, "We reinvested the resulting price competitiveness into customer benefits, creating a virtuous cycle of increased customer numbers and improved performance."
Warehouse club Traders recorded revenue of 190.6 billion won, up 9.9% year-on-year, and operating profit of 42.3 billion won, up 36.9%. The number of customers increased by more than 3%. This includes the effect of the opening of the Magok location in Gangseo-gu, Seoul, in February. The Magok store achieved the highest-ever sales among all Traders locations in the three days following its opening and ranked first in total sales through the end of March.
Major subsidiaries also participated in the trend of improved performance. Notably, Shinsegae Property, which operates Starfield, saw revenue increase by 33.3% to 104 billion won, and operating profit soar by 198.4% to 36.4 billion won. SCK Company, which operates Starbucks, recorded revenue of 761.9 billion won, up 3.7% year-on-year, and operating profit of 35.1 billion won, up 7.3%, driven by continued growth in membership customers and the opening of premium stores. Shinsegae Food's revenue decreased by 61% year-on-year to 358.6 billion won, but operating profit increased by 71.7% to 7.9 billion won due to structural improvements such as withdrawing from low-efficiency businesses.
Additionally, convenience store Emart24 reduced its operating loss by 2.7 billion won from 13.1 billion won in the same period last year through store efficiency improvements. However, e-commerce subsidiaries such as SSG.com and Gmarket saw their losses increase amid intense industry competition.
An Emart official said, "The strategy of strengthening core business competitiveness through continuous innovation and renewal pursued since last year is now producing tangible results," adding, "We will continue to pursue stable, profitability-focused growth through price, product, and space innovation."
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