Lotte Shopping Co.,Ltd. (023530)

**Business Overview** Lotte Shopping, established on July 2, 1970, with the purpose of operating department stores, is a leading retail company in South Korea. Its main business areas include department stores, discount stores, supermarkets, e-commerce, electronics specialty stores, home shopping, and cinema operations. It provides diverse product sales such as apparel, food, and home appliances, as well as rental income and film screenings, as core products and services. In Q1 2025, the discount store segment accounted for the largest portion of revenue at 43.0%, followed by department stores at 23.3%, electronics specialty stores at 15.3%, supermarkets at 8.8%, home shopping at 6.6%, cinema operations at 2.5%, and e-commerce at 0.8%. Its main customers are general consumers, and the company is expanding its business not only domestically but also into Southeast Asian markets such as Vietnam and Indonesia. The department store segment, in particular, is driving revenue growth by targeting high-income individuals, VIP customers, and foreign tourists as its primary clientele. **Core Competencies** Lotte Shopping's strength lies in its diversified retail channels, encompassing both online and offline platforms, including department stores, discount stores, supermarkets, and e-commerce. The department store business segment, in particular, maintains a unique market position in the domestic retail industry and records solid performance, based on its premium brand offerings, strong brand recognition, and prime locations in major cities. Furthermore, the company is securing new growth engines through overseas business expansion into Southeast Asian markets such as Vietnam, and is focusing on strengthening its grocery business and increasing efficiency through the adoption of retail tech and AI technologies. **Performance Analysis** Lotte Shopping recorded revenue of KRW 3,581.6 billion in Q1 2026, showing a 3.6% increase year-over-year. Operating income increased from KRW 386.2 billion in 2022 to KRW 508.4 billion in 2023, then slightly decreased to KRW 473.1 billion in 2024, before growing again to KRW 547.0 billion in 2025. Notably, operating income in Q1 2026 surged by 70.6% year-over-year to KRW 252.9 billion, achieving improved profitability. Net income recorded deficits of KRW -318.7 billion in 2022 and KRW -994.1 billion in 2024, but successfully turned profitable with KRW 169.2 billion in 2023 and KRW 73.6 billion in 2025. This improvement in profitability is primarily attributable to the solid performance of the department store business segment and the improved profitability of its subsidiaries. **Financial Soundness** Examining Lotte Shopping's financial soundness, its debt-to-equity ratio has shown a gradual improvement trend, decreasing from 187.30% in 2022 to 182.79% in 2023, 128.98% in 2024, and 124.77% in 2025. The current ratio has remained relatively low, at 58.17% in 2022, 51.03% in 2023, 56.09% in 2024, and 52.00% in 2025. ROE recorded negative figures of -2.89% in 2022 and -5.84% in 2024, but turned profitable with 1.56% in 2023 and 0.44% in 2025, indicating an improvement in capital efficiency. **Outlook** Lotte Shopping is pursuing six key strategies to achieve its vision of becoming 'the customer's first shopping destination.' These strategies focus on store renewals and shopping mall expansion to re-establish market leadership in key commercial areas, the introduction of Grand Grocery and Ocado solutions to become 'Korea's No. 1 grocery destination,' and the optimization of its e-commerce business. Furthermore, the company plans to actively utilize AI technology to secure new growth engines through expansion into Southeast Asian markets and to transform into a specialized retail tech company. These strategic efforts are expected to contribute to responding to the changing retail environment and laying the groundwork for sustainable growth.