[Click eStock] "FILA Holdings, Limited Short-Term Earnings Momentum"

KB Securities Report

On the 13th, KB Securities evaluated that while low-price buying of Fila Holdings is possible with expectations of a turnaround from a mid- to long-term perspective, short-term earnings momentum is limited. Accordingly, they maintained a 'Buy' investment rating and a target price of 45,000 KRW.

Researcher Park Shin-ae of KB Securities analyzed, "For the second quarter of this year on a consolidated basis, sales are expected to be 1,133.7 billion KRW, down 3% year-on-year, and operating profit is expected to be 128.2 billion KRW, down 16%, in line with consensus."

Sales are projected to decrease by 27%, and operating profit by 75%. Domestic sales are expected to decline by 22%, with operating profit shrinking by 91%. Amid ongoing aggressive restructuring of the online wholesale channel, the recovery of retail channel sales is delayed compared to initial expectations. Design service fees are estimated to increase by 15% to 18 billion KRW.

In the United States, to resolve excess inventory issues, the focus is on inventory depletion, with sales expected to decrease by 29%. Due to sales decline and discount sales, a loss of 24.9 billion KRW is anticipated. Royalty income is predicted to increase by 3%, supported by performance improvements in the Asia and Europe regions.

For the full year, sales are forecasted to decrease by 3% year-on-year to 4,115.7 billion KRW, and operating profit is expected to decline by 1% to 432.5 billion KRW. However, with Acushnet’s sales and operating profit growing by 7% and 10% respectively, it is expected to contribute to the overall company performance.

Researcher Park stated, "Korea will continue restructuring channels that damage brand value, and the U.S. will focus on inventory depletion, resulting in double-digit sales declines for both subsidiaries."

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