Lotte Shopping sinks into red with net loss of 95.1 billion won in Q3

Lotte Shopping logged a significant net loss of 95.1 billion won ($67.1 million) in the third quarter, a major miss of the market expectations for a 56.6 billion won net profit complied by FnGuide.

Lotte Department Store’s branch in Jung District, central Seoul. [LOTTE SHOPPING]

Lotte Shopping logged a significant net loss of 95.1 billion won ($67.1 million) in the third quarter, a major miss of the market expectations for a 56.6 billion won net profit complied by FnGuide.

The net profit was 305.8 billion won in the same period a year earlier.

The net loss was largely due to the low on-year performance of its electronics goods retailer Lotte Himart, according to the company.

Lotte Shopping reported revenue of 4.01 trillion won, up 0.2 percent on year but falling short of analyst expectations of 4.03 trillion won.

Lotte Shopping runs various retail and entertainment brands, such as Lotte Department Store, Lotte Cinema, Lotte Mart and Lotte On.

Lotte Department Store's revenue rose 17.3 percent on year to 769 billion won, and its operating profit rose to 109 billion won from an operating loss of 21 billion won in the same quarter last year.

High sales of fashion items, including women’s wear and international designer products, drove the rise in sales, according to the company.

Sales from branches in China fell 22.5 percent to 5 billion won as stores had to be temporarily closed from Aug. 29 to Sept. 15 due to Covid-19. The fall, however, was offset by sales from its branches in other countries.

Sales from Indonesia rose 152.4 percent to 5 billion won, and those from Vietnam grew 318.8 percent to 5 billion won. The surging sales were mainly due to the reopening of stores in Indonesia and Vietnam in the third quarter, which were both temporarily shut down for some part of the third quarter last year.

Sales at Lotte Cultureworks, which operates Lotte Cinema, rose 139 percent to 188 billion won. The operating profit was 21 billion won, compared to a 32-billion-won operating loss in the same quarter last year.

The company said the premiere of hit films led to higher box office sales. The high performance of movies distributed by the company, such as “Top Gun: Maverick” (2022), also drove sales and helped turn the loss into a profit.

Its hypermarket division, which includes Lotte Mart and Lohbs, logged sales of 1.56 trillion won, up 5.3 percent. Its operating profit was 32 billion won, up 178.6 percent on year.

High sales in its home meal replacements drove sales and led to high operating profits.

Its Lotte On e-commerce business reported sales of 25 billion won, up 4.2 percent on year. Operating loss was 38 billion won, compared to a 46 billion won operating loss the previous year.

Monthly active users on Lotte On amounted to 26.53 million in the third quarter, up 18.9 percent on year.

BY CHO JUNG-WOO [cho.jungwoo1@joongang.co.kr]