Lotte Wellfood (280360) Q3 2025 earnings summary

Executive summary

• Q3 2025 consolidated sales rose 7.3% YoY to KRW 1.1568tn; operating profit fell 8.9% to KRW 69.3bn, while adjusted operating profit excluding one-time costs increased 5.6% to KRW 80.3bn.

• 9M sales increased 4.0% to KRW 3.1962tn, while operating profit declined 32.1% to KRW 120.0bn and net profit fell 17.4% to KRW 88.4bn; higher input costs and weaker operating cash flow weighed on results.

Financial highlights

• Q3 gross profit was KRW 340.9bn and gross margin 29.5%, versus 31.2% a year earlier; net profit rose 8.2% to KRW 49.9bn and ordinary profit was KRW 61.8bn, down 0.4%.

• Q3 operating profit was KRW 69.3bn, down 8.9% YoY; excluding one-time costs, it was KRW 80.3bn, up 5.6% from KRW 76.0bn.

• 9M consolidated gross profit was KRW 899.1bn versus KRW 940.4bn YoY; SG&A was KRW 779.1bn versus KRW 763.7bn.

• 9M profit attributable to owners was KRW 90.0bn versus KRW 109.7bn; basic and diluted EPS were KRW 10,185 versus KRW 12,407.

• 9M operating cash flow was KRW 95.7bn versus KRW 221.3bn YoY; operating-asset and liability movements used KRW 187.8bn of cash.

Outlook and guidance

• FY2025 sales growth guidance: 4–6% consolidated, 2–4% domestic and 12–14% global.

• FY2025 operating margin guidance is 3.0–4.0% reported and ~4.0% excluding one-time costs; domestic margin guidance is 3.0–4.0% reported and 4.0–5.0% excluding one-time costs.

• Domestic outlook cites recovery in core businesses, offset by cocoa cost pressure and one-time management-improvement costs; global profitability faces cocoa and dairy costs and fixed costs from the Pune factory.

• Strategic priorities include expanding exports and global megabrands, developing health-and-wellness products, strengthening digital sales touchpoints, and improving domestic production and logistics efficiency.

• Product development emphasized zero/low-sugar, reduced-calorie, plant-based and meal-replacement offerings, alongside seasonal launches and channel-specific products.