[Click eStock] "F&F, 4Q Earnings Expected to Exceed Estimates"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities maintained its 'Buy' rating and target price of 140,000 KRW for F&F on the 10th, expecting the company's Q4 earnings last year to exceed expectations.

Lee Ji-young, a researcher at NH Investment & Securities, analyzed, "Both Q4 sales and operating profit are expected to surpass expectations," adding, "Despite the warm weather, strong sales of fleece and shoes stood out, and the brand power increase led to a higher rate of full-price sales."

NH Investment & Securities estimated F&F's Q4 consolidated sales at 350.1 billion KRW and operating profit at 57.8 billion KRW, representing increases of 41% and 56% respectively compared to the same period last year. MLB's sales by country are expected to be 132.8 billion KRW in Korea, up 3% from the previous quarter; 8 billion KRW in Asia (Hong Kong, Taiwan, Macau), up 5%; and 6.5 billion KRW in China, up 106%. The researcher explained, "Sales at Korean duty-free shops are expected to decline compared to the previous quarter due to the seasonality of hats, but sales of fleece and shoes in existing channels such as department stores grew significantly, so overall sales are expected to continue growing quarter-on-quarter. In Asia, strong performance continues in Taiwan and Macau, and China is expected to have generated sales of about 3.5 to 4 billion KRW (considering return rates) during the Singles' Day period." Discovery's sales are estimated at 167.2 billion KRW, a 12% increase year-on-year. The researcher added, "Although padding sales were not high due to the warm winter weather, sales of fleece and shoes grew significantly, and these products had a high full-price sales rate, which likely contributed meaningfully to profitability improvement."

This year, there is high expectation for the expansion of the China business and existing brands. The researcher said, "The investment points for F&F this year will be the expansion of the China business and existing brands," adding, "Since the end of last year, offline stores have been launched locally in China, and by the end of this year, a total of 10 stores are planned to open. Monthly sales per store are estimated at about 250 million KRW, and 2020 China sales are projected at approximately 40 billion KRW (including online sales)."

MLB is conducting a Mickey Mouse collaboration starting from this spring/summer (S/S) season, aligning with the global trend of luxury brands collaborating with characters, which is expected to receive positive responses in Asia. The researcher added, "Also, looking at recent sales rankings on China's Tmall, the top three are the Monogram hip sack, Big Ball Chunky embossed, and Monogram sweatshirt, clearly showing item expansion from hats to bags, shoes, and clothing."

This content was produced with the assistance of AI translation services.