[Click eStock] "F&F, Continued Popularity in China... Domestic Sales Expected to Decline in 3Q"

Daishin Securities maintained a buy rating and a target price of 170,000 KRW for F&F on the 12th, expecting that domestic sales in the fourth quarter of this year will turn to slight positive growth. However, they noted that the phenomenon of declining profit margins due to the start of various businesses is likely to continue for the time being.

Yoo Jeong-hyun, a researcher at Daishin Securities, stated, "China continues to experience high growth despite concerns," adding, "Due to a low base effect, a 45% growth compared to the same period last year is expected in the fourth quarter." He also mentioned, "Domestic clothing consumption sluggishness has impacted sales, causing an increase in the selling and administrative expense ratio. Due to the weak yuan exchange rate, the operating profit margin for the third quarter is expected to decline compared to the same period last year."

F&F's third-quarter sales are expected to increase by 17% year-on-year to 518.3 billion KRW, with operating profit rising 11% to 153 billion KRW.

Domestically, clothing consumption showed weakness. Researcher Yoo said, "Due to factors such as weather, the main brand sales mostly recorded a negative growth of about 7-8% compared to the same period last year," and added, "MLB duty-free sales also seem to have continued a negative growth of around 30% due to the sluggish domestic duty-free market, similar to the first half of the year."

In the third quarter, sales in China are estimated to have grown 40% year-on-year due to continued brand popularity locally. As of the end of August, the number of stores in China reached 1,007, which is an increase of about 31% compared to the end of the third quarter last year. Store openings and sales growth remained solid in the third quarter. Sales in Southeast Asia, including Hong Kong, are also estimated to have continued high growth following the first half of the year.

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