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Retail Trade

Lotte Shopping Co., Ltd.

Company Background

Lotte Shopping is a major South Korean distributor with various sales channels, from department stores to large discount stores to home electronics retailers. It boasts the largest sales among South Korea's distribution-related listed companies.

 

The company is accelerating its overseas expansion, including in China, as stiff regulations at home make high domestic growth unlikely.

 

Most of the company's sales come from Lotte Department Store, Lotte Mart large discount stores and Lotte Hi-mart home appliance stores.

 

Lotte Shopping is the operator of 7-Eleven convenience stores in South Korea, and it also runs Lotte Super, a chain of small and medium-sized supermarkets, Lotte Cinema and a home shopping service. It offers financial services, as well.

 

Lotte Duty Free, the biggest duty-free shop in South Korea, is run by Lotte Shopping group company Hotel Lotte.

 

Given South Korea's aging population and declining birthrate, Lotte Shopping can expect little growth in its home market, especially as large discount stores and convenience stores are subject to strict regulations aimed at protecting smaller shops.

 

The company is focusing on developing new businesses, such as outlet malls. Its department store business has stalled as the result of changing spending habits among the aging society.

 

The major players in Lotte Shopping's overseas expansion are department stores and large discount stores. It is particularly expanding the latter in China, Indonesia and Vietnam.

 

While the company's overseas expansions are still in the upfront-investment phase, it plans to turn these operations into a growth pillar.

Business Summary

Lotte Shopping Co., Ltd. engages in the operation of department stores and supermarkets. It operates through the following business divisions: Department Store, Discount Store, Supermarket and Cinema. The Department Store business provides clothing, accessories, appliances, furniture and food through Lotte Department Store. The Discount Store business offers food, household supplies, clothing and sundries through Lotte Mart. The Supermarket business provides general household products and fresh food through Lotte Supermart. The Cinema business offers film investment, distribution and screening through Lotte Cinema. The company was founded on July 2, 1970 and is headquartered in Seoul, South Korea.

Financial Highlights

Dec 2019 KRWUSD
Revenue17,622.00B15,110.81M
Gross Profit6,003.35B5,147.86M
Operating income420,947.09M360.96M
Income before tax-1,243.76B-1,066.52M
Net income-976,764.60M-837.57M
EBITDA1,939.97B1,663.52M
Diluted EPS-32,504.57-27.87
Dividends Per Share3,8003.25
Total Assets33,972.61B29,376.64M
Total liabilities22,070.93B19,085.07M
Total equity10,645.98B9,205.74M
Operating cash flow1,217.18B1,043.73M
Currency in KRWCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 29,127.65B 24,114.32B 17,926.06B 17,820.78B 17,622.00B
Gross Profit 8,003.66B 7,089.68B 6,909.09B 6,841.55B 6,003.35B
Operating income 850,082.45M 758,781.68M 795,155.08M 581,963.36M 420,947.09M
Income before tax -79,763.67M 319,533.38M 254,026.74M -93,861.62M -1,243.76B
Net income -395,788.44M 44,054.75M -136,610.41M -346,737.36M -976,764.60M
EBITDA 1,836.27B 1,731.94B 1,560.25B 1,330.99B 1,939.97B
Diluted EPS -15,241.50 5,874.43 -18,042 -26,159 -32,504.57
Dividends Per Share 2,239.58 2,239.58 5,200 5,200 3,800
Total Assets 40,693.36B 41,915.90B 27,948.48B 26,259.30B 33,972.61B
Total liabilities 23,874.64B 24,920.98B 14,866.25B 13,831.93B 22,070.93B
Total equity 15,978.33B 16,035.41B 12,389.46B 11,705.41B 10,645.98B
Operating cash flow 488,614.10M 1,330.64B 1,408.77B 61,672.33M 1,217.18B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 25,735.61M 20,784.81M 15,856.61M 16,193.08M 15,110.81M
Gross Profit 7,071.59M 6,110.80M 6,111.48M 6,216.66M 5,147.86M
Operating income 751.08M 654.01M 703.35M 528.80M 360.96M
Income before tax -70.47M 275.41M 224.70M -85.28M -1,066.52M
Net income -349.69M 37.97M -120.83M -315.06M -837.57M
EBITDA 1,622.43M 1,492.81M 1,380.13M 1,209.42M 1,663.52M
Diluted EPS -13.46 5.06 -15.95 -23.76 -27.87
Dividends Per Share 1.97 1.93 4.59 4.72 3.25
Total Assets 34,705.01M 34,704.34M 26,106.66M 23,534.06M 29,376.64M
Total liabilities 20,361.29M 20,633.36M 13,886.55M 12,396.42M 19,085.07M
Total equity 13,626.99M 13,276.54M 11,572.99M 10,490.60M 9,205.74M
Operating cash flow 431.71M 1,146.92M 1,246.14M 56.03M 1,043.73M

Valuation Measures

Dec 2019
PER--
ROA-3.24%
ROE-8.74%
Operating margin2.38%
Profit margin-5.54%

Key executives

  • Co-Chief Executive Officer & Director: Won-Jun Lee
  • Co-President, Co-CEO & Director: Hee-Tae Gang
  • Head-Compliance Support: Seol-Ah Lee
  • Managing Director: Jong-Hwan Kim
  • Head-Investor Relations: Jihwan Seol

Shareholders

  • Lotte Corp. (40%)
  • SHIN DONG-BIN (10.2%)
  • HOTEL LOTTE Co., Ltd. (8.8%)
  • National Pension Service of Korea (6.0%)
  • The Vanguard Group, Inc. (1.1%)
  • BlackRock Fund Advisors (1.0%)
  • SHIN YOUNG-JA (1.0%)
  • Hotel Lote Busan Co., Ltd. (0.7%)
  • Dimensional Fund Advisors LP (0.7%)
  • SHIN DONG-JU (0.7%)

Contact Details

Related Companies

  • Lotte Cinema
  • LOTTE REIT Co., Ltd.
  • LOTTE Songdo Shopping Town Co., Ltd.
  • Lotte Cultureworks Co., Ltd.
  • LOTTE Properties (Hanoi) Singapore Pte Ltd.
  • Lotte Shopping Holdings (Singapore) Pte Ltd.
  • LOTTE Town Dongtan Co., Ltd.
  • LHSC Ltd.
  • Shenyang SL Cinema Investment Management Co., Ltd.
  • Lotte Hotel & Retail Vietnam Pte Ltd.
  • Shandong Longzhile Cinema Co., Ltd.
  • Lotte Shopping Co. Ltd. /Global Fashion Bus/
  • Lotte Shopping Co. Ltd. /Investment Div/
  • Lotte Business Management (Tianjin) Co., Ltd.
  • Lotte Super Co., Ltd.
  • Himart Logitech Co., Ltd.
  • Lotte Plaza Market
  • PT Lotte Shopping Avenue Indonesia
  • Lotte Incheon Development Co., Ltd.
  • Chungnam Smartcard Co., Ltd.
  • LOTTE Suwon Station Shopping Town Co., Ltd
  • Igis I Corp.
  • Gyeonggi Smartcard Co., Ltd.
  • PT Lotte Logistics Indonesia
  • Lotte Shopping Plaza Vietnam Co. Ltd.
  • Liaoning Lotte Supermarket Co. Ltd.
  • Lottecinema Vietnam Co. Ltd.
  • Lotte Incheon Town Co., Ltd.
  • LOTTE Members Co., Ltd.
  • Lotte Entertainment

Competitors

  • E-MART Inc.
  • CJ Corporation
  • GS Retail Co., Ltd.
  • CJ ENM Co., Ltd.
  • Hyundai Department Store Co., Ltd
  • GS Home Shopping Inc.
  • Hyundai Home Shopping Network Corporation
  • Shinsegae Co., Ltd
  • Hanwha Corp
  • KISWIRE LTD
  • LG Electronics Inc.
  • Samsung Electronics Co., Ltd.
  • PT Sumber Alfaria Trijaya
  • Daesung Industrial Co., Ltd
  • Gwangju Shinsegae Co., Ltd.
  • NS Shopping Co., Ltd.
  • PT Matahari Department Store Tbk Class A
  • CJ CGV Co., Ltd
  • Moda-InnoChips Co., Ltd.
  • Next Entertainment World Co., Ltd.
  • Harim Holdings Co., Ltd.
  • AK Holdings, Inc.
  • ORION Holdings Corporation
  • Savezone I & C Corp.
  • SHOWBOX Corp.
  • SK Telecom Co., Ltd.
Last Updated on 4 Aug, 2020

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