E-mart Posts 14-Year High Q1 Operating Profit on Chung Yong-jin's Overhaul

E-mart, South Korea's largest discount-store operator, said its first-quarter operating profit climbed to roughly 178.3 billion won, the highest for a January-to-March period in 14 years. The figure rose about 11.9% from a year earlier even as consolidated revenue slipped 1.3% to around 7.12 trillion won.

The company said the result was the best first-quarter operating profit since 2012, when it earned about 190.5 billion won. Management credited the turnaround to a strategy that combined bulk purchasing to sharpen price competitiveness with continued heavy investment in remodeled stores designed to draw more shoppers.

On a standalone basis, the flagship E-mart chain generated about 4.72 trillion won in revenue and 146.3 billion won in operating profit, up 1.9% and 9.7% respectively. That marked the discount chain's best standalone operating profit in eight years. Executives said savings from integrated purchasing were funneled into lower prices and into "space innovation" at key outlets, expanding private-brand and value-for-money product lines to widen the customer base.

Renovated stores showed sharp gains. The Ilsan outlet, reopened under the Starfield Market concept, saw sales jump 75.1% and visitor numbers more than double from a year earlier. The company said the proportion of shoppers staying more than three hours at three remodeled stores rose an average of 87.1%.

The warehouse-style chain Traders posted quarterly revenue above 1 trillion won for the first time, at about 1.06 trillion won, with operating profit of 47.8 billion won, up 12.4%. Sales of its flagship private brand, T Standard, grew about 40% year-on-year.

The earnings reflect the "paradigm shift" that Chairman Chung Yong-jin called for in his New Year message, when he said the group needed to set new rules for the market. Chung visited core sites such as Starfield locations four times in the first quarter to oversee operations directly.

Subsidiaries also improved, with the Starbucks operator SCK Company lifting revenue 7.3% to about 817.9 billion won. E-commerce arm SSG.com and convenience-store unit E-mart24 remained in the red, however, leaving profitability at those businesses as unfinished work. E-mart said it plans to build on its core growth by pushing into new areas, including AI data-center construction and direct partnerships with promising U.S. firms.