[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 12th that it is maintaining its “Buy” rating and target price of 165,000 won for LOTTE WELLFOOD(280360).

Joo Young-hoon, an analyst at NH INVESTMENT & SECURITIES, emphasized, “The effects of the cost restructuring implemented last year are now fully evident. This is because the company continued its trend of significant operating profit improvement—following the second quarter—despite rising cost pressures due to the war in the Middle East and a decline in domestic sales caused by a slowdown in the consumer market recovery.”
Previously, third-quarter consolidated revenue and operating profit came in at 1.1739 trillion won (+1.5% year-over-year) and 89.9 billion won (+29.7% year-over-year), respectively, exceeding the consensus estimate for operating profit. Revenue from domestic operations fell 1.7% year-over-year, and overall revenue growth was lackluster, partly due to a decline in ice cream sales—which account for a significant portion of third-quarter revenue—caused by unfavorable weather conditions.
Analyst Ju noted, “Nevertheless, operating profit increased by 10.3% year-over-year as the effects of cost improvements were reflected even more significantly. It is important that the company succeeded in improving profitability even amid sluggish sales, and we view this as a factor that enhances the stability of its earnings.” He added, “Global business revenue increased by 16.1% year-over-year. Revenue growth trends were observed across all major subsidiaries, and we expect their contribution to consolidated earnings to continue to rise.”
In particular, cost savings resulting from domestic operational improvements amounted to approximately 30 billion won, and he estimated that the trend of improving earnings would continue into the fourth quarter. He noted, “There is a very high likelihood of achieving the 2026 earnings guidance of 4–5% revenue growth and an operating profit margin of 4–6%.”
Overseas operations are also on track. Analyst Ju noted, “It is also positive that global business revenue—a key factor in terms of growth potential and valuation for food and beverage companies—is experiencing high growth. Third-quarter global revenue increased by 16.1% year-over-year, and the share of overseas revenue expanded to 22.8% (+2.6%)," he said, adding, "Performance in Kazakhstan (+32.5%) and India (+22.6%), which account for a high proportion of revenue, stands out. Along with the revenue improvement, cost-cutting efforts were implemented, resulting in an even greater improvement in profitability."