Emart’s net profit falls 99.7% on year in Q1

Emart’s net profit fell 99.7 percent on year to 2.7 billion won ($2 million) in the first quarter, falling far short of market consensus of 41.6 billion won compiled by FnGuide. Sales inched upwards 1.9 percent to 7.13 trillion won, slightly...

Emart's headquarters in Seongsu-dong, eastern Seoul [THE JOONGANG ILBO]

Emart’s net profit fell 99.7 percent on year to 2.7 billion won ($2 million) in the first quarter, falling far short of market consensus of 41.6 billion won compiled by FnGuide.

Sales inched upwards 1.9 percent to 7.13 trillion won, slightly below analysts’ expectations of 7.24 trillion won.

Operating profit fell 60.4 percent to 13.7 billion won, far below market consensus of 73.7 billion won.

Emart blamed the loss of profit on inflation and a lack of consumer spending amid the economic slowdown.

The retailer also blamed the reduction on the number of holidays, three days less than the same period a year before. Renovation costs of the Yeonsu branch in Incheon and the Kintex branch in Gyeonggi were also cited as loss factors.

Emart runs Emart stores, SSG.com, Gmarket, Emart24 and Starbucks branches in Korea.

Sales in SSG.com decreased 0.9 percent to log 421.3 billion won. Operating loss was 15.6 billion won, less than the 25.7 billion-won operating loss in the same period last year.

Operating loss decreased as the e-commerce platform focused on its premium brands in luxury and beauty products.

E-commerce platform Gmarket’s sales decreased 4.2 percent to 303.1 billion won. Operating loss was reported at 10.9 billion won, less than the 19.4 billion-won operating loss in the same period last year.

The platform reduced losses by strengthening brands that are profitable and efficiently managing logistics and marketing costs.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]