1. What Happened at Lotte Himart?

Lotte Himart reported KRW 1.12 trillion in revenue for H1 2025, a significant drop of 52.3% year-over-year. However, operating loss narrowed to KRW 5.7 billion, and net loss improved to KRW 26.7 billion, signaling a potential return to profitability.

2. Why These Results?

The main reason for the sales decline is the decrease in demand for home appliances due to the overall economic downturn and weakened consumer sentiment. However, Lotte Himart’s aggressive cost-cutting efforts have led to improved profitability. Furthermore, the company is focusing on securing future growth engines through new businesses and strategies, such as launching the private brand ‘PLUX’, introducing subscription services, and strengthening online channels.

3. What’s Next for Lotte Himart?

The shift to positive operating and net income in Q2 2025 is encouraging. This demonstrates that profitability improvement efforts are translating into tangible results. However, continued sales decline, exchange rate and interest rate volatility, and intensifying competition remain challenges for Lotte Himart.

  • Positive Factors: Improved profitability, expectations for new businesses and strategies
  • Negative Factors: Potential for continued sales decline, macroeconomic variables, intensifying competition

4. What Should Investors Do?

The current investment recommendation for Lotte Himart is ‘Neutral’. Despite the positive signs of profitability improvement, the continued decline in sales and external uncertainties must be considered. Investors should closely monitor the detailed Q2 earnings analysis, sales trends from Q3 onwards, and the performance of new businesses to adjust their investment strategies accordingly.