Lotte Shopping reported a more than 30% increase in operating profit for the third quarter of this year, driven by strong performances from its department stores and hypermarkets. The department store segment achieved its highest-ever third-quarter sales, while the hypermarket division nearly doubled its operating profit. However, results varied across business units, with Lotte Hi-Mart experiencing declining profitability and ongoing losses in its e-commerce operations.
On November 6, Lotte Shopping announced that its consolidated sales for the third quarter reached 3.65 trillion won, a 7.1% increase compared to the same period last year. Operating profit rose to 175.6 billion won, marking a 34.5% increase. The company also reported a net profit turnaround, moving from a loss of 48.7 billion won in the same quarter last year to a profit of 142.4 billion won this year. The operating profit margin improved from 3.8% to 4.8%.
The department store segment was the primary driver of this performance. Sales in the department store division reached 808.1 billion won, a 5.7% increase year-on-year, achieving the highest third-quarter sales on record. Operating profit for this segment increased by 35.7% to 112.9 billion won, fueled by rising purchases from foreign tourists and strong sales of high-margin fashion items.
The overseas department store business also saw growth, with sales increasing by 14.8% to 35.0 billion won and operating profit soaring by 99.2% to 7.1 billion won. Profitability improved in stores located in Vietnam and Indonesia, with the 'Lotte Mall Westlake Hanoi' surpassing 1 trillion won in cumulative sales within three years of opening.
In the hypermarket segment, third-quarter sales reached 1.46 trillion won, with operating profit at 21.6 billion won, reflecting increases of 9.7% and 87.5%, respectively, compared to the previous year. The effects of last year's consumer recovery coupon distribution and the timing of the Chuseok holiday contributed to the growth in domestic same-store sales. However, performance declined overseas due to weak consumer spending and intensified competition in Indonesia.
The e-commerce division, which operates Lotte On, also reduced its losses. Sales increased by 18.4% to 26.7 billion won, while operating losses narrowed to 7.2 billion won, a reduction of 2.4 billion won from the same period last year. Improved profitability was attributed to a focus on fashion and beauty products and increased advertising revenue.
In contrast, Lotte Hi-Mart reported only a 0.3% increase in sales to 654.5 billion won, while operating profit plummeted by 70.6% to 5.6 billion won. Although care services and mobile and online sales grew, poor performance in large and home appliance sales negatively impacted profitability.
For the first three quarters of this year, Lotte Shopping's cumulative sales reached 10.72 trillion won, up 4.9%, while operating profit surged by 62.3% to 518.4 billion won.
Looking ahead, Lotte Shopping plans to focus on renovating major department store locations and attracting customers with year-end events in the fourth quarter. The food court at the Jamsil store will be transformed into a gourmet space of approximately 11,000 square meters by the first half of 2028, and a large media facade will be introduced on the exterior of the Myeongdong Young Plaza.
Im Jae-cheol, head of Lotte Shopping's finance division, stated, "The solid performance of domestic and international department stores, the recovery of profitability in key business units like hypermarkets, and the successful restructuring of subsidiaries have combined to achieve significant growth and profit improvement."
* This article has been translated by AI.
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