Lotte Wellfood (280360) Q4 2024 earnings summary

Executive summary

• FY24 sales fell 0.5% YoY to KRW 4,044.3bn; operating profit declined 11.3% to KRW 157.1bn, while net profit rose 21.0% to KRW 82.0bn.

• Adjusted for KRW 20.9bn in one-time labor-related costs, operating profit was KRW 178.0bn, up 0.6% YoY.

Financial highlights

• FY24 gross profit rose 5.6% to KRW 1,195.5bn, but SG&A increased 8.8% to KRW 1,038.4bn; operating margin fell to 3.9% from 4.4%.

• Q4 sales declined 0.9% YoY to KRW 970.5bn; operating loss was KRW 19.6bn, and net loss was KRW 25.0bn.

• FY24 consolidated net margin improved to 2.0% from 1.7%, despite lower operating profit.

Outlook and guidance

• FY25 consolidated sales growth guidance is 4–6%; operating margin target is 4.5–5.5%, versus 3.9% in FY24.

• Domestic sales growth target is 2–4%, with operating margin at 4.0% level versus 3.4% in FY24; priorities include price normalization and higher-margin H&W mix.

• Global sales growth target is 12–14%, with operating margin of 8–9% versus 6.9% in FY24.