Lotte Shopping (023530) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue and operating profit declined, mainly due to weak grocery business, despite strong department store performance and increased foreign inbound customer sales; overseas operations, especially in Vietnam, posted record results, while Indonesia was impacted by political unrest.

• Net profit turned to a loss, mainly due to impairment losses on investment property, offsetting improved equity method gains.

• E-commerce and Hi-Mart divisions showed operational improvements, with cost reductions and adjusted profit growth.

• Revenue for the first nine months of 2025 was KRW 10.2 trillion, down from KRW 14.0 trillion year-over-year, with a consolidated net loss of KRW 40.9 billion compared to a net loss of KRW 994.1 billion in the prior year.

• The company maintained a strong liquidity position with cash and cash equivalents of KRW 1.42 trillion at quarter-end.

Financial highlights

• Consolidated revenue was KRW 3.4 trillion in Q3 2025, down 4.4% year-over-year; operating profit was KRW 131 billion, down 15.8%; net profit turned to a net loss of KRW 49 billion due to impairment loss on invested property.

• 1-3Q25 revenue: KRW 10,217B (-2.8% YoY); operating profit: KRW 319B (-2.0% YoY); net profit: -KRW 41B.

• EBITDA for Q3 2025: KRW 382B (-10.8% YoY); gross profit: KRW 1,622B (-4.2% YoY); gross margin for the period was 47.8%.

• SG&A expenses totaled KRW 4.57 trillion, and finance costs reached KRW 541.7 billion.

• Basic and diluted EPS were both negative at KRW -2,151.

Outlook and guidance

• Department store and outlet mall revenue showed double-digit growth in October, expected to continue in Q4; high-margin fashion and sports categories are expected to drive Q4 profit.

• Grocery business recovering in late October and November, with large-scale promotions supporting Q4 growth; e-commerce GMV rebounding with double-digit growth expected in Q4, especially in fashion.

• Annual guidance still considered achievable if Q4 performance is strong, especially in department store and grocery segments.

• Ongoing cost efficiency and business portfolio adjustments are expected to support operating profit improvement, especially in e-commerce and subsidiaries; overseas expansion, particularly in Vietnam, remains a growth driver.

• The company aims to maintain a dividend payout ratio of at least 35% and a minimum annual dividend of KRW 3,500 per share through 2026.