[Click e-Stock] "Handsome, Domestic Apparel Momentum Expected"

On June 2, Hana Securities stated that although Handsome's performance has been sluggish through the first half of the year, the potential for further declines in its stock price is limited. The firm analyzed that both performance and stock price are likely to recover in a delayed manner, depending on the recovery of the upstream industry conditions. The target price was maintained at 20,000 won, with a 'Buy' investment rating.

In the first quarter, Handsome's consolidated revenue was 380.3 billion won (down 3% year-on-year), and operating profit was 21.8 billion won (down 33%), both falling short of market expectations. Seo Hyunjung, a researcher at Hana Securities, explained, "The continued contraction in consumption and abnormal weather conditions have created a challenging business environment, leading to ongoing sluggish sales. Both offline and online channels saw sales declines of 4% and 1%, respectively, compared to the same period last year, and both character (premium line) and casual brands recorded negative growth."

The industry downturn continues, with not only apparel retail sales but also apparel sales in department stores and online channels all experiencing negative growth in the first quarter. Although Handsome's sales decline has been narrowing each quarter, it is assessed that a downward revision of performance will only be concluded once a visible recovery in sales occurs. Seo further noted, "Since the company has already expanded into various categories (import brands/edit shops) and portfolios (cosmetics/perfume), a turnaround in growth is expected if the consumer economy and industry conditions recover." She forecasted that consolidated operating profit for the second quarter will see a slight increase, driven by inventory and SG&A cost efficiency.

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