SCK Company, the operator of Starbucks Korea, swung to a net operating loss in the second quarter of this year.

According to E-Mart's second-quarter earnings disclosure on the 13th, SCK Company posted net sales of 747.3 billion won for the second quarter, down 6.1% from the same period last year.

Operating profit shifted from an operating profit of 40.3 billion won in the second quarter of last year to an operating loss of 18.4 billion won this year.

This translates to a decrease of 58.7 billion won in operating profit within a year.

Compared to the operating profit of the previous quarter, the first quarter of this year, profit also plunged by 47.7 billion won.

The deterioration in SCK Company's performance came amid continuing consumer backlash following the "Tank Day" controversy that arose in May of this year.

Starbucks Korea held a tumbler promotion named "Tank Day" on May 18, the anniversary of the May 18 Democratization Movement.

At the time, promotional materials for the event used phrases such as "Tank Day" and "desk-clearing" (tak, referring to a historical police statement about Park Jong-chul's death under torture).

Online communities and social networking services raised points that these expressions disparaged the May 18 Democratization Movement and the 1987 death under torture of pro-democracy activist Park Jong-chul.

As the controversy grew, Starbucks Korea immediately suspended the event and apologized.

On the day of the controversy, Shinsegae Group dismissed SCK Company CEO Son Jung-hyun and the executive in charge, and initiated disciplinary procedures against related executives and employees.

Among some consumers, movements to boycott Starbucks also emerged.

However, SCK Company's second-quarter IR data did not explicitly specify the Tank Day controversy or the boycott as direct causes of the performance decline.

The company cited the absence of the June Summer Frequency event as a factor behind the sluggish second-quarter performance.

The company explained that failing to hold the representative marketing event, which typically drives summer customer traffic and sales, affected its performance.

The number of stores actually increased.

As of the end of the second quarter, SCK Company's store count stood at 2,185, an increase of 49 stores compared to last year.

For the cumulative first half of the year, SCK Company's net sales rose 0.5% year-on-year to 1.5651 trillion won, but operating profit plummeted 85.5% to 10.9 billion won.

(Photo: Yonhap News)