LOTTE Himart Co (071840) Q4 2024 earnings summary

Executive summary

• FY24 revenue reached KRW 2.3567 trillion, down 9.7% year-over-year, with a strong recovery in the second half driven by renewed stores and growth in PB and overseas sourcing.

• Operating profit for FY24 was KRW 1.7 billion, significantly lower than FY23, impacted by one-time items such as TMON bad debt and wage issues.

• Net profit for FY24 was KRW 305.4 billion, including a KRW -264.7 billion goodwill impairment; excluding one-time items, the year showed actual profit.

• The home appliance market continued to contract, with market size estimated at KRW 29 trillion for 2024, down from KRW 32 trillion in 2022.

Financial highlights

• 4Q 2024 revenue was KRW 556.4 billion, down 3.8% year-over-year; full-year revenue was KRW 2.3567 trillion, down 9.7%.

• Gross profit margin improved to 28.7% in 2024 from 26.0% in 2023.

• Operating profit for the year was KRW 1.7 billion, down 79.1% from KRW 8.2 billion in FY23.

• Net profit was negative KRW 3,054 million for the year, reflecting continued losses.

• Goodwill impairment losses totaled KRW 2,647 million in 2024.

Outlook and guidance

• FY25 revenue is projected at KRW 2.3 trillion, with operating profit guidance of KRW 10 billion, excluding one-time expenses.

• Adjusted operating profit is expected to turn positive in 2025 after several years of losses.

• Strategic focus on customer lifetime care, PB and international brand expansion, and e-commerce innovation.