April 25, 2024

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[THE INVESTOR] Lotte Shopping’s department stores and discount outlets are recovering slower than expected, said KB Investment and Securities on July 18, lowering the target price to 275,000 won (US$244.01) from 300,000 won.

Both sectors will fail to satisfy market expectations. Its sales in the second quarter will increase 5 percent on-year to 6.04 trillion won and operating profit by 187 percent to 120.7 billion own. Revenue for the whole year will slip 1 percent from last year to 24.32 trillion won while operating profit will hike 45 percent to 766.2 billion won, according to analyst Park Sin-ae.

Department stores are advancing slower than those of rivals, weighed down by declining sales at branches outside Seoul. Discount outlets remain sluggish and annual operating profit from the division will plunge 68 percent to 7.1 billion won. It is unlikely to show strong momentum but investors may approach its stocks for short-term trading, said the analyst maintaining a “buy” recommendation. 

By Hwang You-mee (glamazon@heraldcorp.com)