'Earnings Shock' Hansome, Q3 Operating Profit 6 Billion Won... "Launching New Cosmetics Brand"

Both Sales and Operating Profit Decline
Announcement of Plans to Enhance Corporate Value in Fashion and Cosmetics Sectors

Hansome announced on the 7th that its operating profit for the third quarter recorded 6 billion KRW, a sharp decline of 31% compared to the same period last year.

Sales amounted to 314.2 billion KRW, down 3% during the same period, and net profit decreased by 9% to 5 billion KRW. This significantly missed the securities market estimates. Previously, the securities market expected Hansome to record operating profit and sales of 11.5 billion KRW and 330.7 billion KRW, respectively, for the third quarter.

Regarding this, a Hansome official said, "The prolonged contraction of consumer sentiment and the slowdown in fall and winter outerwear sales due to abnormal high-temperature phenomena led to a decrease in third-quarter sales and operating profit." In particular, although selling and administrative expenses were reduced by about 10 billion KRW from 185.4 billion KRW to 178.2 billion KRW compared to the same period last year, profitability deteriorated due to the impact of decreased sales.

On the same day, Hansome announced a plan to enhance corporate value along with its earnings report. The company aims to strengthen profitability by pursuing mid- to long-term growth strategies in the fashion, cosmetics, and retail sectors and to increase shareholder value by expanding shareholder returns.

In the fashion sector, Hansome plans to expand the market entry of its flagship brands Time and System to Europe, North America, and Asia, thereby strengthening their status as global brands. Next year, they plan to open exclusive stores in local department stores. This year, Hansome held a System Paris flagship store and an exclusive popup at the Galeries Lafayette department store in France. Additionally, as demand for new luxury goods increases, the company will discover overseas brands through its own select shops such as Mui, Tom Greyhound, and FOURM.

In the cosmetics sector, Hansome plans to actively expand its business. Currently, Hansome’s cosmetics business can be summarized by the ultra-premium skincare brand 'Oera' and niche perfumes (Fuegia1833, Liquid Perfume Bar). Compared to other fashion companies, the scale of the cosmetics business is relatively small. Hansome is promoting the global expansion of Oera into Chinese and Southeast Asian duty-free shops. They also plan to develop new products to enhance brand competitiveness.

Hansome is also launching new beauty brands. The company stated, "We will expand the integration of lifestyle elements such as accessories and food and beverages centered on the concepts of existing fashion brands," and added, "For niche perfumes, we will attract new imported brands."

Furthermore, in the second half of next year, Hansome plans to open the Time Cheongdam luxury street flagship store and Daechi The Hansome House to provide differentiated brand experiences. They also plan to increase profitability by expanding the sales proportion of Hansome’s own online select shop, EQL.

Regarding strengthening shareholder returns, Hansome announced that it will increase the cash dividend source to more than 15% of separate operating profit by 2027. The company intends to expand the total dividend amount through profit improvement. It will also engage in share buybacks and cancellations. Hansome plans to cancel 50% of the remaining treasury shares (worth 9.7 billion KRW) by 2025 and a total of 22 billion KRW worth of treasury shares by 2027.

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