E-mart posted growth in both standalone sales and operating profit in the second quarter, driven by stronger competitiveness in its core hypermarket business. However, a consumer boycott of Starbucks pushed the company's consolidated operating result into the red.
E-mart disclosed in a regulatory filing Thursday that its standalone operating profit surged 64 percent year-on-year to 25.6 billion won ($18.1 million) in the second quarter. Total sales rose 3.5 percent to 4.44 trillion won.
For the first half of the year, cumulative standalone operating profit climbed 15.4 percent from a year earlier to 171.9 billion won, while total sales grew 2.7 percent to 9.16 trillion won.
E-mart said the results reflected sustained customer-focused innovation in pricing, products and store environments, allowing the company to achieve both top-line growth and improved profitability in the second quarter, as it had in the first.
Sales and customer traffic during the company's signature discount event, "Goraeit Festa," rose 8.8 percent and 4.1 percent, respectively, compared with the same period last year.
Three stores — in Ilsan, Dongtan and Gyeongsan — renovated last year as part of the company's store-renewal initiative saw average sales and customer visits rise 79.5 percent and 42.4 percent, respectively, year-on-year. The share of customers who stayed three hours or more at those locations expanded by an average of 90.8 percent.
On a consolidated basis, however, second-quarter net sales fell 1.8 percent year-on-year to 6.92 trillion won, and the company recorded an operating loss of 43 billion won. First-half consolidated net sales and operating profit came in at 14.04 trillion won and 135.3 billion won, respectively, both down from a year earlier.
Warehouse-style retailer Traders posted second-quarter total sales of 992.7 billion won, up 10.3 percent year-on-year, while operating profit rose 12.7 percent to 34.6 billion won — double-digit growth on both the top and bottom lines.
Traders attributed the performance to a differentiated product lineup centered on bulk items, exclusive products, private-label goods and specialized food offerings.
Sales of its private-label brand "T Standard" grew 24.2 percent year-on-year in the second quarter, while "T Cafe," which emphasizes value for money, rose 13.9 percent. Customer visits increased 3.7 percent over the same period.
Everyday, E-mart's convenience-store chain, also recorded growth in both sales and profit in the second quarter. Total sales reached 389.1 billion won and operating profit came in at 8.1 billion won, up 7.2 percent and 51.7 percent, respectively. The company credited stronger product competitiveness through consolidated purchasing, an expanded franchise model, and improved shopping convenience through online commerce and short-distance delivery.
Among subsidiaries, Josun Hotel & Resort stood out for profitability improvement. Higher occupancy rates and improved revenue per guest, driven by rising tourist numbers, lifted second-quarter net sales 0.3 percent to 188.2 billion won, while operating profit jumped 41.1 percent year-on-year to 10.1 billion won.
E-mart24 recorded net sales of 532.5 billion won. Store efficiency gains helped narrow its operating loss by 2.1 billion won year-on-year to 2.3 billion won.
SCK Company, which operates Starbucks Korea, saw second-quarter net sales fall 6.1 percent year-on-year to 747.3 billion won amid a marketing controversy that disrupted revenue. The unit posted an operating loss of 18.4 billion won.
E-mart plans to sharpen its core business competitiveness in the second half of the year and expand its market presence. The company will strengthen key product and private-label strategies across channels while accelerating Starfield Market renewals, new store openings and last-mile service expansion.
Traders will open new stores before year-end to sustain its growth momentum. The unit plans to roll out new in-store digital signage as the first step toward a full online-offline integrated retail media network, and will expand its WOW Shop format.
SCK Company will focus on stabilizing operations by rebuilding brand trust. The unit plans to overhaul its pre-management processes and expand social-contribution activities to restore its brand image, while pursuing sales recovery and profitability improvement through broader customer touchpoints and a differentiated product strategy.
On the online front, SSG.com will concentrate on strengthening its grocery competitiveness and restoring profitability. The platform will enhance its product lineup in coordination with offline stores and upgrade membership-based customer benefits. It also plans to expand processing capacity at its PP centers and extend fast-delivery coverage to improve delivery efficiency and last-mile capabilities.
"In the second half, we will continue to innovate in pricing, products and store environments to further strengthen our core business competitiveness and market leadership, while actively identifying new business opportunities to build a more solid foundation for medium- and long-term growth," an E-mart official said.
spa@heraldcorp.com
