[Click eStock] "Shinsegae, Q2 Earnings Expected to Decline... Target Price Down"

On the 10th, Korea Investment & Securities forecasted that Shinsegae's second-quarter earnings would fall significantly short of market expectations. Accordingly, they maintained a 'Buy' investment rating but lowered the target price to 235,000 KRW.

Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "Shinsegae's consolidated sales for the second quarter are expected to increase by 2.1% year-on-year to 1.6088 trillion KRW, while operating profit is expected to decrease by 21.2% to 117.8 billion KRW. Sales and operating profit are projected to miss market expectations by 3.5% and 16.0%, respectively."

Researcher Kim analyzed, "The total sales growth of department stores (separate basis) in the second quarter was 2.8%, which was better than concerns, but due to sluggish sales of high-margin items such as clothing, operating profit is expected to decline by 19.6% year-on-year to 43.6 billion KRW (OPM 9.0%)."

Shinsegae's duty-free business is also recovering slowly. This is because the Chinese economy and cosmetics industry are recovering more slowly than expected. Researcher Kim forecasted, "Considering the poor performance of China's traditional shopping event 618, Shinsegae Duty-Free's sales and operating profit in the second quarter are unlikely to improve significantly compared to the first quarter of this year."

Researcher Kim diagnosed, "Contrary to the sluggish recovery of the domestic economy, the continuous recovery of overseas travel demand by domestic consumers has negatively impacted Shinsegae's performance and stock price."

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