Lotte Himart posts first net sales growth in 5 quarters, driven by care service and private brands

Lotte Himart has staged a sales comeback after five quarters of decline, even as the broader home appliance industry remains sluggish.

The electronics retailer disclosed Wednesday that total sales in the third quarter reached 802.2 billion won ($598 million), up 0.7 percent from the same period last year. Net sales rose 0.3 percent to 654.5 billion won. Total sales grew for the second consecutive quarter, while net sales turned positive for the first time in five quarters.

By business segment, revenue from the care service division surged 62 percent year-on-year and was up 50 percent on a cumulative basis through the third quarter. The care service offering manages the full lifecycle of home appliances — from the point of purchase through the period of use to eventual replacement. More than 1 million customers have purchased an appliance bundled with a care service plan, pushing the attach rate to 59 percent.

Sales of IT and mobile products also climbed 11 percent from a year earlier, with mobile sales alone up 28 percent — the third consecutive quarter of double-digit growth in that category this year. Private-brand sales rose 23 percent.

Operating profit, however, fell to 5.5 billion won in the third quarter, down 13.4 billion won from 19 billion won a year earlier. The company attributed the decline to weaker demand from households relocating — a key driver of appliance replacement — and to a base effect from last year's late heat wave that had boosted seasonal appliance sales, which weighed on revenue from large appliances and lifestyle and kitchen appliances.

Lotte Himart said it plans to expand customer touchpoints and improve profitability by driving bundled purchases in high-margin categories such as large and lifestyle appliances. "We will accelerate the transformation of our business structure by focusing on expanding key strategic categories, including care services, private brands, mobile and online," a company official said.