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Kurly / “First-ever operating profit surplus” with 6% increase in sales

“First-ever operating profit surplus” with 6% increase in sales
Improved logistics efficiency through withdrawal from Songpa Center and opening of Changwon and Pyeongtaek Centers

Kurly announced that it recorded its first-ever quarterly operating profit surplus in the first quarter of this year. According to the quarterly report disclosed by Kurly, sales in Q1 2024 (on a standalone basis) reached an all-time high of 538.1 billion KRW. The company maintained a stable growth trend, with a 6% increase compared to the same period last year, while operating profit during the same period improved by 31.4 billion KRW, recording a surplus of 525.7 million KRW. This is the first time Kurly has recorded a quarterly operating profit surplus since its founding in 2015, 9 years ago.

Kurly’s achievement of its first operating profit surplus is analyzed to be the result of a fundamental improvement in its profit and loss structure. Since last year, Kurly has made significant efforts to build a sustainable growth structure by diversifying revenue sources and reducing delivery expenses and commission fees.

In fact, costs including delivery fees and commissions amounted to 63.8 billion KRW in Q1, a 6% decrease from the same period last year. During the same period, the proportion of these expenses relative to total sales also dropped by 1.5 percentage points year-on-year, reaching 11.9%, indicating structural improvements across the business.

Logistics efficiency gains from the newly opened Changwon and Pyeongtaek Centers last year also had a major impact. With the adoption of the latest logistics automation equipment, productivity increased and delivery processes became more efficient and stable. The withdrawal from the Songpa logistics center, whose contract had expired, also contributed significantly by eliminating inefficient cost execution.

On the revenue diversification front, the company focused on fee-based 3P (seller-delivered), Kurly Membership, and logistics agency services. Notably, the 3P business grew fivefold in Q1 compared to the same period last year. During the same time, Beauty Kurly also grew by 34%, driving overall performance improvement. As a result, Kurly’s total gross merchandise value (GMV) in Q1 reached 736.2 billion KRW, a 13% increase year-on-year.

In addition, in Q1, the company also achieved its first quarterly surplus in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), a key indicator of cash generation from operations. EBITDA in Q1 stood at 7.1 billion KRW, an improvement of 29.7 billion KRW compared to Q1 2023. Previously, Kurly had recorded its first monthly EBITDA surplus in December 2023. This trend continued into this year, leading to a quarterly EBITDA surplus.

With this first quarterly surplus, Kurly now has a sustainable profit structure and plans to focus this year on enhancing growth and securing future drivers based on its own cash generation capacity. While broadly maintaining the trend from last year, the company intends to prioritize maintaining a cash flow breakeven point over maximizing profitability, and to invest incoming cash into growth initiatives.

Through this, Kurly aims to drive sustainable revenue growth including expanded market share. In detail, the company plans to make comprehensive investments to enhance customer shopping convenience and engagement. It also plans to continuously promote new business development and the expansion of its ‘Next-day Delivery’ service coverage. A Kurly representative stated, “We achieved our first quarterly operating profit surplus through revenue diversification and structural improvements,” and added, “Although nothing is concretely confirmed regarding the IPO, we plan to resume the process at a favorable time in close consultation with underwriters.”