Emart's third-quarter consolidated operating profit came in at 46.1 billion won. Profitability in its core businesses, including discount stores and Traders, improved. But weakness at subsidiaries, including SCK Company, the operator of Starbucks Korea, dragged down earnings. SCK Company's operating loss is about the same size as the consolidated operating profit.
Emart disclosed its third-quarter results on the 11th. Standalone gross sales were 5.104 trillion won, up 11.1% from a year earlier. Operating profit was 166.0 billion won, up 46.3%. It was the first time quarterly gross sales exceeded 5 trillion won. Cumulative standalone operating profit for the first three quarters was 337.9 billion won, up 28.8%.
The core business growth was led by Traders, the warehouse-style discount chain. Traders' third-quarter gross sales were 1.1668 trillion won, up 16.6%. Operating profit jumped 40.5% to 55.2 billion won. Both figures are record highs on a quarterly basis. Emart Everyday posted gross sales of 399.5 billion won and operating profit of 11.0 billion won, up 7.7% and 11.1%, respectively.
The consolidated results told a different story. Consolidated net sales were 7.4919 trillion won, an increase of only 91.1 billion won from a year earlier. The consolidated operating profit of 46.1 billion won is down 69.6% from the third quarter last year. The gap with standalone operating profit reaches 119.9 billion won. In effect, subsidiaries' results ate up a substantial part of the profit earned by the core business.
The weakest performer was SCK Company. Its third-quarter operating loss reached 45.3 billion won. The suspension of the e-Frequency program and other factors are reported to have affected the loss. Convenience store chain Emart24 also remained in the red with an operating loss of 2.9 billion won. However, the loss narrowed by 4.9 billion won from a year earlier.
SSG.com streamlined its products, membership and logistics operations. Through this, it improved its profit and loss by 15.8 billion won from the same period a year earlier. Chosun Hotels & Resorts' operating profit rose 2.7% to 22.6 billion won.
An Emart official said, "The core competitiveness we have steadily built up has led to an expanded customer base, driving both top-line growth and improved profitability." He added, "We will continue retail innovation while expanding the benefits customers feel, to further solidify our market leadership."