PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩300 per share · Prices as of the 2026-10-02 close
Lotte Hi-Mart is shifting its growth axis toward IT/mobile products and the Ansim Care service amid structural weakness in its core large-appliance business, seeking an earnings rebound in the second half.
Q2 2026 operating profit fell to KRW 0.9 billion from KRW 10.5 billion a year earlier, though the real decline narrows to about KRW 2.9 billion excluding a base effect from a prior VAT refund.
IT/mobile sales grew 15.3% in Q1 and 13.7% in Q2, outpacing the average growth rate of Korea's communication device and computer market.
Ansim Care service revenue grew at a 56% CAGR over the past three years, and the linked purchase rate of appliances with services rose from 15% in 2023 to 52.5% in H1 2026.
Owners' net profit posted losses for four consecutive years from 2022 to 2025, with a 2024 net loss of KRW 305.4 billion far exceeding the year's operating profit of only KRW 1.7 billion.
Monthly revenue declined in April-May 2026 before turning to 8.3% growth in June, while monthly operating profit swung from a loss in April to profits in May and June.
Lotte Hi-Mart is South Korea's largest appliance and IT specialty retailer, part of the Lotte Shopping group, selling large appliances, home/kitchen appliances, and IT/mobile products through a nationwide store network.
Sales are broadly split between large appliances such as TVs and refrigerators, which have replacement cycles of 8 to 10 years, and IT/mobile products such as phones and earphones, which have shorter cycles of around four years.
In Q2 2026, large-appliance sales fell 1.4% year over year and life/kitchen appliance sales fell 7.7%, while IT/mobile sales rose 13.7% and drove store traffic.
The company is also expanding its private brand 'PLUX,' aimed at small, budget appliances for single-person households, to reduce reliance on manufacturer brands.
The 'Ansim Care' service, which combines appliance repair, cleaning, and relocation/installation, grew at a 56% compound annual rate over the past three years, with first-half 2026 revenue of KRW 37.3 billion, up 44% year over year.
The rate of customers purchasing appliances together with services rose from 15% in 2023 to 52.5% in the first half of 2026, moving the business beyond simple unit sales toward higher customer lifetime value.
The company has also expanded its used-phone trade-in business, growing the number of stores capable of processing used-phone purchases from one in February to 89 in July.
The competitive landscape mixes rival specialty retailers such as Electroland, manufacturer-owned stores from Samsung and LG, and online channels, with intensifying competition from manufacturer direct stores continuing to weigh on results.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩594.2B | ₩10.5B | 1.8% |
| 2025Q3 | ₩652.5B | ₩19B | 2.9% |
| 2025Q4 | ₩524.4B | -₩8.7B | −1.7% |
| 2026Q1 | ₩496.9B | -₩14.8B | −3.0% |
| 2026Q2 | ₩591.1B | ₩900M | 0.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩3.3T | -₩52B | -₩527.9B | −1.6% | −40.8% | 90.2% |
| 2023 | ₩2.6T | ₩8.2B | -₩35.4B | 0.3% | −2.8% | 89.7% |
| 2024 | ₩2.4T | ₩1.7B | -₩305.4B | 0.1% | −32.9% | 103.6% |
| 2025 | ₩2.3T | ₩9.6B | -₩2.4B | 0.4% | −0.3% | 89.9% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Annual revenue declined for four straight years, from KRW 3,336.8 billion in 2022 to KRW 2,610.1 billion in 2023, KRW 2,356.7 billion in 2024, and KRW 2,300.1 billion in 2025.
Operating profit moved from a loss of KRW 52.0 billion in 2022 to gains of KRW 8.2 billion in 2023, KRW 1.7 billion in 2024, and KRW 9.6 billion in 2025, maintaining a modest positive trend.
Owners' net profit, however, remained in the red across all four years, with losses of KRW 527.9 billion in 2022, KRW 35.4 billion in 2023, KRW 305.4 billion in 2024, and KRW 2.4 billion in 2025, showing very high year-to-year volatility.
The large 2024 net loss is disproportionate to that year's operating profit of only KRW 1.7 billion, suggesting a sizable one-off non-operating charge, potentially related to asset or goodwill impairment.
Looking at recent quarters, Q3 2025 was the year's strongest with operating profit of KRW 19.0 billion and net profit of KRW 14.2 billion, but the company swung back into losses in Q4 2025 (-KRW 8.7 billion) and Q1 2026 (-KRW 14.8 billion).
Q2 2026 operating profit of KRW 0.9 billion fell sharply from KRW 10.5 billion a year earlier, though excluding a KRW 6.6 billion VAT refund booked in the prior-year quarter, the real decline narrows to about KRW 2.9 billion.
On a monthly basis, the company posted an operating loss of KRW 4.1 billion in April before turning profitable with KRW 2.4 billion in May and KRW 2.5 billion in June.
As a result, cumulative owners' net loss over the most recent four quarters (Q3 2025 through Q2 2026) stands at roughly KRW 24.6 billion, indicating that despite quarterly swings, a full return to profitability has not yet been achieved.
Korea's appliance market has entered a mature, low-growth phase due to already-high penetration of durable goods, and is under pressure as a slowdown in real estate transactions combined with growth in online retail channels reduces offline specialty store sales.
In terms of distribution channels, multi-brand specialty stores still hold a significant share, but online sales are projected to post the fastest annual growth rate of 5.84% through 2031, expanding faster than offline.
Manufacturers such as Samsung Electronics and LG Electronics are also strengthening their own direct stores and online malls, creating a structural burden as intensifying competition from manufacturer direct stores weighs on results.
More recently, appliances have been shifting from simple product sales toward subscription and care-service-centered models; Samsung Electronics entered the market with its 'AI Subscription Club' in December 2024 and introduced a premium care service called 'Blue Path' in September 2025.
This trend aligns with Hi-Mart's own expansion of Ansim Care and subscription services, but as manufacturers strengthen their own direct care offerings, the room for retailers to differentiate through service may narrow.
On the global competitive front, Chinese manufacturers continue to advance in the TV market and have taken leading positions in certain categories such as robot vacuum cleaners, a potential factor that could intensify price competition across the product categories retailers carry.
Overall, the offline appliance retail business that Hi-Mart operates in continues to navigate a dual squeeze of stagnant demand and channel diversification, relying on growth in non-core segments such as services and mobile to sustain itself.
The company has set a target of accelerating revenue growth in the second half, planning to continue prioritizing the IT/mobile category, which has shorter purchase cycles and higher visit frequency, to expand customer touchpoints.
Its stated plan is to widen customer touchpoints through IT/mobile in the second half and link that traffic to purchases of large appliances and life/kitchen appliances to speed up operating profit improvement, which is seen as the key variable going forward.
The Ansim Care service is growing broadly across sub-categories, with home interior services up 177%, insurance up 70%, appliance cleaning up 41%, and relocation/installation up 20%, suggesting continued revenue contribution in the second half.
The used-mobile business is at a stage of leveraging expanded purchase infrastructure to raise the rate at which trade-in customers go on to buy new products.
The company is also pursuing a plan to strengthen productivity through AI-driven operational efficiency and upgraded in-store customer data analysis and sales-support systems.
However, since monthly revenue only turned positive starting in June, whether the targeted second-half acceleration will actually translate into quarterly results still needs to be confirmed.
Views in the brokerage community are also mixed, with concerns about weak industry conditions coexisting with expectations for margin improvement from a better service and product mix.
The price-to-book ratio sits well below 1x, placing the stock in a range that reflects a substantial discount to net asset value. This can be read as a reflection of several consecutive years of net losses and growth concerns tied to the expansion of online and manufacturer direct-sales channels.
Looking at the most recent four quarters together, operating profit has swung significantly from quarter to quarter and owners' net profit remains in loss territory, so a clear improvement in earnings stability has not yet been confirmed.
Compared with past trading ranges, the current share price level appears to sit closer to the lower end of that range. Dividends have continued in recent years, but until net profit fully returns to positive territory, the continuation and size of future dividends could remain linked to the pace of earnings recovery.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-23
IT/mobile sales grew 15.3% in Q1 and 13.7% in Q2, outpacing the average growth rate of Korea's communication device and computer market. The strategy of leveraging shorter replacement cycles than large appliances to boost store visit frequency appears to be translating into actual traffic gains.
The used-phone purchase infrastructure has also expanded rapidly from one store in February to 89 in July, establishing itself as a new growth channel.
Ansim Care service revenue grew at a 56% compound annual rate over the past three years and continued to grow 44% in the first half of 2026. Sub-categories such as home interior, insurance, appliance cleaning, and relocation/installation are all growing, diversifying the revenue base.
The rise in the appliance-service linked purchase rate from 15% in 2023 to 52.5% can be read as a signal of a shift in the earnings structure beyond simple hardware sales.
Monthly total revenue growth improved clearly, moving from -6.2% in April and -0.8% in May to +8.3% in June. Over the same period, monthly operating profit swung from a loss in April to profits in May and June, an early sign of profitability recovery. The company has stated its intention to carry this trend through the second half of the year.
In Q2 2026, large-appliance sales fell 1.4% year over year and life/kitchen appliance sales fell 7.7%, showing continued weakness in the categories that make up the largest share of revenue.
A decline in real estate transactions and move-ins directly affects large-appliance demand, and the expansion of online and manufacturer direct channels is also contributing to lower offline specialty store sales.
Growth in IT/mobile is offsetting much of this, but the scale of that growth has not yet fully made up for the decline in the core business.
Owners' net profit failed to escape losses in all four years from 2022 through 2025. In 2024, the net loss of KRW 305.4 billion was disproportionately large relative to operating profit of only KRW 1.7 billion, suggesting a sizable non-operating factor may have been involved.
Net losses continued into Q1 2026 (-KRW 20.4 billion) and Q2 2026 (-KRW 4.5 billion), meaning a clear signal of a full return to profitability has not yet been confirmed.
Online channels are expanding faster than offline at an annual growth rate of 5.84%, which could weaken the relative standing of specialty retailers over time. Intensifying competition from manufacturer direct stores has also been cited as a factor behind weaker results.
In addition, Chinese appliance makers are gaining share in categories such as TVs and robot vacuum cleaners, which could increase price competition pressure across the broader range of products retailers carry.
The large net loss recorded in 2024 was far greater than that year's operating profit, and the possibility of a recurrence of one-off asset- or goodwill-related impairment charges cannot be ruled out.
Quarterly operating profit has also swung sharply, from KRW 19.0 billion in Q3 2025 to -KRW 14.8 billion in Q1 2026, leaving relatively low earnings predictability.
According to a report by Economy Talk News in late August 2026, NH Investment & Securities lowered its target price by 24.7% to KRW 7,000, maintaining a conservative view.
Large-appliance demand is closely tied to real estate transactions and move-in volumes, so a prolonged housing market slowdown could delay a demand recovery. The long 8-10 year replacement cycle for large appliances also limits factors that could drive short-term demand.
The timing of any recovery in the core business could vary depending on the pace of domestic consumer sentiment improvement.
The simultaneous expansion of manufacturer direct stores, rapid growth of online channels, and rising market share of Chinese appliance makers could put continued pressure on retailers' bargaining power and margins.
As Samsung Electronics and LG Electronics strengthen their own subscription and care services, the room for Hi-Mart to differentiate on service could narrow relatively. This combination of competitive pressures is viewed as a structural factor unlikely to be resolved in the short term.
The Q3 2026 earnings release should be checked to see whether the revenue recovery seen since June and IT/mobile-Ansim Care cross-selling are translating into actual operating profit improvement.
It will be worth checking whether the revenue growth of the PLUX private brand and Ansim Care sub-services continues into Q4, and whether the improved sales mix is reflected in actual margins.
Both the potential recovery in real estate transaction volumes and large-appliance demand, as well as changes in competitive intensity from online and manufacturer direct channels, should be monitored together.
It is worth watching whether brokerages revise their target prices and earnings forecasts after incorporating the Q3 results.
Lotte Hi-Mart's traditional large-appliance-centered retail model faces a dual squeeze from a real estate market slowdown and the expansion of online and manufacturer direct channels, and the company is responding by shifting its growth axis toward IT/mobile products and the Ansim Care service.
Annual results show operating profit remaining modestly positive even as revenue has steadily declined since 2022, but owners' net profit posted losses for four consecutive years, including what appears to be a large one-off loss in 2024.
Looking at the most recent four quarters (Q3 2025 through Q2 2026), results swung significantly, from a strong Q3 to consecutive losses in Q4 and Q1, followed by near-breakeven operating profit in Q2.
The turn to revenue growth in June and the return to monthly operating profit are positive signals, but whether this carries through the rest of the second half remains unconfirmed.
Structural growth in the Ansim Care service and IT/mobile segment is offsetting much of the weakness in the core business, but it is not yet large enough to fully replace the decline in core revenue.
Views among brokerages remain split between concerns about weak industry conditions and expectations for margin improvement from a better service mix, making it important to continue monitoring upcoming quarterly results and shifts in the channel competitive landscape.
Report written 2026-09-05 · Data as of 2026-09-04
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