Lotte Shopping (023530) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was KRW 3,457 billion, down 1.6% YoY, mainly due to domestic challenges, while overseas business, especially in Vietnam and Indonesia, showed strong growth.

• Operating profit rose 29% YoY to KRW 148.2 billion, driven by overseas performance, renovated stores, and efficiency improvements.

• Net profit dropped 75.1% YoY to KRW 16.2 billion, impacted by a high base last year and one-off gains in the prior year.

• The business is diversified across department stores, discount stores, electronics, supermarkets, home shopping, film, e-commerce, and other segments, with discount stores contributing the largest share of sales.

• Lotte Mall West Lake Hanoi and Bacha Coffee both turned profitable in Q1.

Financial highlights

• Q1 2025 consolidated revenue: KRW 3,456.8 billion, down from KRW 3,513.3 billion in Q1 2024.

• Operating profit: KRW 148.2 billion, up from KRW 114.9 billion in Q1 2024.

• Net profit attributable to owners: KRW 16.2 billion, compared to KRW 77.9 billion in Q1 2024.

• EBITDA increased 2.7% YoY to KRW 396 billion, with margin improving to 11.5%.

• Domestic revenue accounted for 85% and overseas for 15% of total revenue.

Outlook and guidance

• Department store revenue expected to recover in Q2 as political environment improves and flagship renovations complete.

• Overseas stores, especially in Vietnam and Indonesia, anticipate continued strong SSSG, with Q2 earnings expected to surpass Q1.

• E-commerce projected to achieve double-digit growth in Q2, excluding business transfer impact.

• Renovated domestic stores and new e-grocery initiatives are anticipated to support future performance.

• Ongoing cost control and operational efficiency measures are expected to support profitability.