Lotte Duty Free announced on the 14th through Hotel Lotte Co., Ltd.'s semiannual report that its second-quarter duty-free business revenue recorded 668.5 billion won, a 19.3% decrease compared to the same period last year, while operating profit turned to a surplus of 6.5 billion won.
Sales increased by 5% compared to the previous quarter, and operating profit achieved a surplus for two consecutive quarters following the first quarter.
Revenue in the second quarter decreased due to the ongoing high exchange rates, economic recession, and strategies to reduce the sales proportion of large duty-free stores; however, operating profit turned to a surplus as revenue from individual tourists (FIT) and group tourists increased due to reduced commission costs and strengthened marketing for both domestic and foreign customers.
Cumulative sales in the first half amounted to 1.3054 trillion won, a decrease of 20.8% compared to the previous year, but operating profit turned to a surplus of 21.8 billion won.
Lotte Duty Free's overseas business is also showing a favorable trend. Sales at Lotte Duty Free's overseas stores increased by about 8% compared to the same period last year, and operating profit also turned to a surplus.
Lotte Duty Free extended its contract for the Singapore Changi Airport store by three years in May and plans to continue achieving consistent performance in overseas businesses in the second half of the year.
In the second half, with the implementation of a visa-free entry policy for Chinese group tourists at the end of September and the APEC (Asia-Pacific Economic Cooperation) summit in Gyeongju in October, it is expected that the market conditions will improve as the number of group tourists increases.
In line with this, Lotte Duty Free is collaborating with local offices and travel agencies in China to operate exclusive travel packages that combine shopping and tourism and is enhancing shopping infrastructure at city duty-free stores along with online and offline promotions.