LOTTE (004990) Q2 2026 earnings summary

Executive summary

• 2Q26 consolidated revenue rose 1.2% YoY to KRW 4.1tn; operating profit fell 9.3% to KRW 129bn, while net profit returned to KRW 64.4bn.

• F&B growth and Retail’s return to operating profit were offset by lower IT Services/Bio CDMO earnings and higher biopharma manufacturing costs.

Financial highlights

• 1H26 revenue was KRW 7.72tn, up 1.1% YoY; operating profit rose 9.3% to KRW 175.1bn, and net profit turned positive at KRW 78.8bn.

• 2Q26 separate operating revenue increased 15.2% YoY to KRW 80.8bn; operating profit rose 38.3% to KRW 30.7bn and net profit reached KRW 119.8bn.

• Separate earnings growth reflected higher brand royalty and dividend income; net profit also benefited from reversal of an impairment loss on investment securities.

• Total assets were KRW 23.65tn, total equity KRW 9.89tn and total liabilities KRW 13.76tn.

Segment performance

• F&B revenue grew 5.8% YoY to KRW 2.59tn and operating profit rose 16.0% to KRW 131.1bn; OPM improved to 5.1% from 4.6%.

• Wellfood operating profit rose 88.5% on domestic confectionery and ice cream growth, overseas strength and efficiency; Chilsung operating profit fell 10.4% amid higher packaging costs.

• GRS revenue advanced 21.0%, supported by higher sales per store and the Vietnam merger, while operating profit declined 27.5% amid raw-material cost increases.

• Retail revenue declined 2.9% to KRW 1.22tn after strategic store restructuring; Korea Seven returned to operating profit through underperforming-store closures and operating efficiencies.

• IT Services/Bio CDMO etc. revenue fell 12.1% to KRW 450bn and shifted to a KRW 31.2bn operating loss; shutdowns, upgrades and hiring weighed on biopharma operations.