Lotte Wellfood (280360) Q1 2025 earnings summary

Executive summary

• Q1’25 consolidated sales rose 2.5% YoY to KRW 975.1bn; operating profit fell 56.1% to KRW 16.4bn as elevated cacao costs pressured profitability.

• Net profit increased 13.3% YoY to KRW 22.7bn, while operating margin declined to 1.7% from 3.9%.

• Weaker frozen confectionery and meat-processing earnings, alongside higher selling expenses, offset revenue growth.

Financial highlights

• Gross profit fell 8.7% YoY to KRW 253.4bn; gross margin declined to 26.0% from 29.2%.

• SG&A declined 1.3% YoY to KRW 237.0bn, with SG&A as a share of sales falling to 24.3% from 25.2%.

• Consolidated profit attributable to owners was KRW 23.7bn versus KRW 21.5bn; basic and diluted EPS were KRW 2,677 versus KRW 2,433.

• Consolidated operating cash flow was negative KRW 34.2bn versus positive KRW 47.7bn YoY; investing cash flow was positive KRW 19.8bn versus negative KRW 153.4bn.

Outlook and guidance

• FY2025 consolidated sales growth forecast at 4–6%, with an operating margin target of 4.5–5.5%.

• FY2025 domestic sales growth forecast at 2–4%, with an operating margin target of 4.0% level; priorities include sales recovery, price normalization and productivity.

• FY2025 global sales growth forecast at 12–14%, with an operating margin target of 8.0–9.0%, supported by India and productivity improvements.

• Strategy prioritizes global sales, production and logistics efficiency, health-and-wellness product development, and expansion of online and convenience-store channels.