Lotte Shopping is Korea's largest integrated retailer, running many channels within a single company — marts and supermarkets (grocery), department stores, Hi-Mart, Lotte On, Lotte Cinema and home shopping. Its structure is to build revenue bulk with the “sell a lot cheaply” mart business and earn profit at the higher-margin department stores. In Q1 2026 department-store revenue grew 8.2% and revenue from foreign customers surged 92%, lifting department-store operating profit by 47%, and a fair-disclosure of preliminary results on May 11 confirmed a strong recovery of company-wide operating profit (+70.6%) and net profit (+694%) along with a narrowing e-commerce loss. The points worth noting are that department-store margin recovery and a shrinking e-commerce loss are continuing, and with a P/B of 0.34x and last year's trailing P/E of 101x being an illusion of depressed profit that falls to the low double digits on a forward basis, the low-P/B turnaround logic is strong — but with a current ratio of 52%, an interest-coverage ratio below 1x and borrowings due to be repaid concentrated in 2026-2027, the financial burden is the key issue.
At-a-glance assessment financial health · growth · profitability · valuation
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 52.0%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- Revenue fell 1.8% year over year (3-year trend: falling).
- Net profit swung from a loss a year earlier back into the black (a turnaround).
- Most recent quarter (Q1 2026) revenue was 3.6% higher than a year earlier.
- ROE is 0.3% (controlling-interest basis). It is below the sector average.
- Operating margin is 4.0%.
- P/B is low versus peers too, so it looks cheap on an asset basis as well.
Ownership & governance As of 2020-12-31
Largest shareholder Lotte Corporation 40% (corporate)
Controlling bloc incl. related parties 61.88%
With the controlling bloc holding 62%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Lotte Shopping is Korea's largest integrated retailer, running several retail channels within a single company.
- Its largest revenue share comes from grocery (Lotte Mart and Lotte Super), which posted revenue in the ₩1.3-trillion range in Q1, while its highest-margin business is department stores.
- Beyond that it holds the electronics chain Lotte Hi-Mart, the online mall Lotte On (e-commerce), Lotte Cinema (movie theaters), home shopping and more.
- In other words, its structure is to build revenue bulk with the “sell a lot cheaply” mart business and earn profit at the higher-margin department stores.
- In Q1 2026 department-store revenue grew 8.2% and, especially, revenue from foreign customers surged 92%, lifting department-store operating profit by 47%, while the chronically loss-making e-commerce business sharply narrowed its loss.
- The latest close is ₩158,400 and the market cap is ₩4.5 trillion.
- The price sits below the 20-day line (₩177,545) and above the 60-day line (₩156,793).
- With the short- and mid-term trends diverging, the direction should be read separately.
- The RSI (an indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 42.8, a neutral level.
- The one-month change is -19.0%, the three-month change is +52.2%, and the price sits -22.2% below its 52-week high.
- Relative strength versus the KOSPI is 79 (on a 1-99 scale, converting the past year's return against the index with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 21% of all stocks by strength.
- Over the past three months it outpaced the index by 19.0%.
- Chart reading is best done together with volume and disclosure dates.
- Looking at the valuation metrics, the gap between “last year's numbers” and “this year's numbers” is large.
- The P/E ratio (how many times one year of profit the price represents) appears at 101x, but this is an illusion arising because 2025 net profit was depressed to ₩51.5 billion by the aftermath of past impairment charges.
- Q1 2026 net profit of ₩143.9 billion alone is already close to three times last year's full-year figure, so as profit normalizes the P/E falls sharply.
- Conversely, the P/B (how many times net assets the price represents) is 0.30x, meaning it trades at a third of net assets.
- The finances, though, have parts to watch.
- The debt ratio (debt against equity) is 139%, the current ratio (assets convertible to cash against debt due within a year) is a low 52%, and with an interest-coverage ratio (how many times operating profit covers interest) below 1x, the interest burden is heavy.
- ROE (how much is earned in a year on equity) is a still-low 0.3%, but this is a figure at the point where profit has just begun to recover.
- Over five years, revenue eased gradually from ₩15.5 trillion (2021) to ₩13.7 trillion (2025), the look of a mature market (about -3% a year).
- The direction of profit, however, differs.
- Operating profit steadily improved from ₩207.6 billion in 2021 to ₩547 billion in 2025, and net profit swung from a large loss of ₩-968 billion in 2024 to a ₩51.5 billion profit in 2025, then jumped again to ₩143.9 billion in Q1 2026 (+694% year on year).
- Q1 operating profit was also ₩252.9 billion, up 70.6% from the prior year.
- In other words, revenue is stagnant but the profit structure is improving, centered on the higher-margin department stores — an “earnings turnaround” is the key.
- For the full year, since Q1 is the department-store peak season the remaining quarters will be somewhat lighter, but if this recovery trajectory continues, full-year net profit has ample room to normalize well above last year's ₩51.5 billion.
- From this view the forward P/E falls to the low double digits, a completely different picture from last year's trailing 101x.
- Recent disclosures show earnings improvement and financial management appearing together.
- A fair-disclosure of Q1 preliminary results on May 11 confirmed a strong recovery — operating profit +70.6% and net profit +694% — and on June 11 the company disclosed a cash and in-kind dividend decision and an investor briefing (IR).
- At the same time, across May and June, securities registration statements and issuance-result reports related to debt securities (corporate bonds) came out one after another, read as fundraising to manage borrowings maturing heavily in 2026-2027.
- On July 1 a disclosure “clarifying a rumor or media report” appeared, showing heightened market attention amid a short-term surge in the share price.
- The strengths are clear.
- Profit is actually recovering with department stores at the core (Q1 operating profit +70.6%, net profit +694%), backed by a surge in revenue from foreign customers and a narrowing e-commerce loss.
- The P/B of 0.34x is heavily discounted to net assets, and last year's trailing P/E of 101x is an illusion created by depressed profit, so on a forward basis it falls instead to the low double digits.
- The cautions are also clear.
- With a current ratio of 52% and an interest-coverage ratio below 1x, financial headroom is tight, and with borrowings due to be repaid concentrated in 2026-2027, operating cash could be drawn toward that.
- Revenue itself is stagnant in a mature market.
- In sum, if department-store margin recovery and a shrinking e-commerce loss continue and it absorbs the borrowing repayments without strain, the low-P/B turnaround logic strengthens; conversely, if consumption slows or the financial burden grows, the pace of recovery could slow.
🔎 Valuation vs peers Undervalued
Compared against listed retailers with overlapping business character among department-store and complex-retail names — Hyundai Department Store (department-store focused), Hyundai Home Shopping (retail, low P/B) and Shinsegae (department-store and complex retail) as the reference set.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hyundai Department Store | 17.40x | 0.79x | 4.56% |
| Hyundai Home Shopping | 10.58x | 0.45x | 4.21% |
| Shinsegae | 423.56x | 1.32x | 0.31% |
(a) Relative to net assets, the P/B of 0.34x is the lowest in the peer set, placing it at a large discount to asset value. (b) The trailing P/E of 101x is an illusion arising from 2025 net profit being depressed to ₩51.5 billion by the aftermath of past impairment charges; Q1 net profit of ₩143.9 billion alone already far exceeds last year's full-year figure, so as profit normalizes the forward P/E falls to the low double digits. (c) In other words, on last year's confirmed-earnings metric (high P/E) alone it looks expensive, but on this year's recovering-profit basis it appears as an undervalued stretch discounted on both net assets and earnings. That said, liquidity and the borrowing-repayment burden are variables for the pace of recovery.
Price history Close · MA20 · MA60
The latest close is ₩158,400 and the market capitalization is ₩4.5 trillion. The price sits below its 20-day moving average (₩177,545) and above its 60-day moving average (₩156,793). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 42.8, a neutral level. The one-month change is -19.0%, the three-month change is +52.2%, and the position relative to the 52-week high is -22.2%. Relative strength versus the KOSPI is 79 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 79% of all stocks. Over the past three months it outpaced the index by 19.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +19.00% / 6M +42.68% / 12M -12.31%
Key metrics vs sector median
Valuation
The P/E of 86.91x is above the sector median (16.77x). The P/B of 0.30x is below the sector median (0.56x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is 0.3%, below the sector average (3.0%). The operating margin is 4.0%. The debt ratio is 138.6%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $9.6B | $9.3B | $9.1B | -1.77% ↑ faster |
| Operating profit | $337.0M | $313.6M | $362.6M | +15.62% ↑ faster |
| Net profit | $115.6M | -$641.6M | $34.2M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $10.3B | $10.3B | $9.6B | $9.3B | $9.1B |
| Operating profit | $137.6M | $256.0M | $337.0M | $313.6M | $362.6M |
| Net profit | -$193.7M | -$215.1M | $115.6M | -$641.6M | $34.2M |
| Revenue CAGR | 4-yr avg -3.09% | ||||
Revenue fell 1.8% year over year (2023 ₩14.6 trillion → 2024 ₩14.0 trillion → 2025 ₩13.7 trillion), and the three-year trend is 'falling'. That said, the rate of decline narrowed from the prior year. Operating profit rose 15.6% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is -3.1%. The two-year revenue CAGR is -2.9%. In the most recent quarter (Q1 2026), revenue was 3.6% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
Points to watch
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 52.0%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- Revenue fell 1.8% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-05-11EarningsFair-disclosure of consolidated preliminary Q1 2026 results — revenue ₩3,581.6 billion (+3.6%), operating profit ₩252.9 billion (+70.6%), net profit ₩143.9 billion (+694%).Near term: stronger earnings momentum as a department-store-led profit recovery is confirmed. Medium term: grounds for the illusion of a high trailing P/E to dissolve as profit normalizes. Source
- 2026-05-15FilingFiling of the Q1 2026 quarterly report — detailed disclosure of results by segment (department store, grocery, electronics, e-commerce, culture) and financial position.Near term: allows checking detailed results by segment. Medium term: material for reviewing financial position such as debt and liquidity. Source
- 2026-05-28FilingFiling of a securities registration statement to issue debt securities (corporate bonds) — followed by finalized issuance terms, a prospectus and an issuance-result report.Near term: the fundraising process is proceeding. Medium term: refinancing in nature to meet borrowings maturing heavily in 2026-2027. Source
- 2026-06-09FilingSecurities registration statement finalizing debt-security issuance terms — corporate-bond issuance size, coupon and other terms confirmed.Near term: better visibility on meeting maturities as funding terms are fixed. Medium term: in a financial structure with a heavy interest burden, the impact of the funding rate on profit needs checking. Source
- 2026-05-29FilingCorporate governance report disclosure — disclosing governance status such as the board and shareholder rights.Near term: limited impact. Medium term: reference material for tracking whether shareholder returns and governance improve. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 operating profit | ₩252.9 billion | ₩252.9 billion(+70.6%) | Confirmed | link |
| Q1 2026 net profit | ₩143.9 billion | ₩143.9 billion(+691.8%) | Confirmed | link |
| 2025 full-year revenue | 13₩738.4 billion | 13₩738.4 billion | Confirmed | link |
| 2026 full-year net profit (in-house estimate) | approx. ₩400.0 billion | — | Unverified | — |
Recent filings
- 2026-06-10Disclosure
- 2026-06-10Disclosure
- 2026-06-09Disclosure
- 2026-06-04Disclosure
- 2026-06-04Amended filing
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-28Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-11EarningsFair-disclosure notice
- 2026-05-08OwnershipOwnership-change filing
- 2026-05-08OwnershipLargest-shareholder ownership change report
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.