[Click e-Stock] "Lotte Shopping to See Stronger Performance Momentum in Q4"

On September 25, Heungkuk Securities predicted that although Lotte Shopping would post somewhat sluggish results in the third quarter, its performance momentum is expected to strengthen in the fourth quarter due to improved consumer sentiment.

Lotte Shopping is expected to achieve sales of 3.6 trillion won in the third quarter, a slight increase of 0.3% year-on-year, but its operating profit is forecast to decrease by 0.4% year-on-year to 154.2 billion won.

Park Jongryul, a researcher at Heungkuk Securities, explained, "While there were some positive factors such as improved consumer sentiment and favorable asset effects, these did not lead to a full-fledged expansion across all channels. Department stores are expected to see profit growth and e-commerce is projected to reduce its operating losses, while discount stores, supermarkets, and home shopping are likely to record operating profits similar to last year."

Researcher Park predicted that as positive asset effects, such as those from the stock market and real estate prices, are fully reflected, the operating performance momentum in the fourth quarter will be stronger than in the previous quarter. He said, "With improved top-line growth and margin improvement across channels, the growth rate of consolidated operating profit will significantly exceed that of sales. This will be driven by solid profit generation in the department store segment, improved results at electronics specialty stores, and enhanced profitability at discount stores."

Researcher Park forecast that Lotte Shopping's annual sales this year will be 13.9 trillion won, a slight decrease of 0.6% year-on-year, but operating profit will increase by 18.9% year-on-year to 557.4 billion won.

The buy investment rating and target price of 90,000 won were maintained.