Lotte Shopping (023530) Q4 2025 earnings summary

Executive summary

• Q4 2025 consolidated revenue rose 1.3% YoY to KRW 3.5 trillion, while FY25 revenue was KRW 13.74 trillion, down 1.8% YoY, led by strong department store and Vietnam business performance.

• Operating profit surged 54.7% YoY to KRW 228 billion in Q4 and increased 15.6% YoY to KRW 547 billion for FY25, aided by improved department store results and a base effect from prior year one-off expenses.

• Net profit turned positive at KRW 150 billion in Q4 and KRW 74 billion for FY25, supported by higher operating profit, equity method gains, and reduced asset impairment losses.

Financial highlights

• Department store foreign sales hit a record KRW 735 billion, up 29% YoY, with major branches showing robust growth; overall department store revenue grew 0.3% YoY in FY25, OP up 22.5%.

• Vietnam department store and hypermarket units posted high growth, with hypermarket revenue and OP rising for five consecutive years and OP margin at 9.5%.

• Domestic department store revenue grew 14.2% YoY to KRW 970 billion; OP increased 22% to KRW 220 billion despite one-off closure costs.

• Domestic grocery revenue was KRW 1.3 trillion (+0.4% YoY), with operating loss narrowing to KRW 20 billion; domestic hypermarket and supermarket revenue declined 4.2% YoY, but operating loss narrowed.

• E-commerce revenue fell 10.9% YoY to KRW 3 billion, but gross margin improved and losses narrowed due to cost optimization; FY25 e-commerce revenue fell 9.1% YoY.

• Overseas department store revenue rose 10% to KRW 36 billion, with OP turning positive at KRW 5.6 billion; overseas department store and hypermarket segments saw revenue growth of 9.5% and 3.3% YoY, respectively.

• Hi-Mart revenue declined 5.7% YoY, but OP improved by KRW 8 billion to KRW -9 billion; Home Shopping revenue dropped 9.6% YoY, OP down 24%.

• Cultureworks (cinema) revenue was KRW 128 billion; OP loss improved by KRW 14 billion to KRW -2 billion, with a 39.7% increase in operating profit.

Outlook and guidance

• FY 2026 revenue guidance is KRW 14.3 trillion (+4% YoY), with OP of KRW 650 billion (+19%).

• Guidance revised from previous mid- to long-term targets to reflect market and cost structure changes.

• No significant one-off impairments expected in 2026; Hi-Mart performance closely monitored.

• E-commerce expected to reach break-even point in 2026, driven by focus on high-margin products.

• Continued focus on expanding large-format stores, attracting foreign customers, and sustaining Vietnam growth momentum.