LOTTE (004990) Q2 2025 earnings summary

Executive summary

• Revenue for 2Q25 was KRW 4,043 billion, down 1.6% year-over-year; operating profit fell 13.9% to KRW 142 billion, mainly due to raw material cost pressures despite strong global F&B sales.

• Net loss narrowed to KRW 69 billion from KRW 147 billion in 2Q24, reflecting improved performance in some subsidiaries and reduced one-off losses.

Financial highlights

• 1H25 consolidated revenue was KRW 7,628 billion, down 2.8% year-over-year; operating profit dropped 31.7% to KRW 160 billion.

• F&B division 2Q25 revenue grew 1.4% year-over-year to KRW 2,452 billion, but operating profit declined 16.6% to KRW 113 billion due to higher cocoa prices and one-off costs.

• Retail (Korea Seven) saw 2Q25 revenue fall 9.5% year-over-year to KRW 1,255 billion, with operating losses narrowing to KRW 8 billion.

• Other businesses posted a 4.1% year-over-year revenue increase to KRW 512 billion and a 282.9% surge in operating profit to KRW 17 billion in 2Q25.

• Separate basis operating income rose 25.7% year-over-year in 2Q25, driven by dividend income from Lotte Shopping.

Outlook and guidance

• F&B companies expect improved earnings in 2H25, supported by consumption coupons, favorable weather, and stabilizing raw material prices.

• Retail expects a favorable business environment in 2H25 due to government consumption coupons and weather conditions.