(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Sangjin] Heungkuk Securities predicted on the 1st that Handsome will continue its sluggish performance in the second quarter of this year in the wake of the sluggish consumer economy. The target price was lowered from 33,000 won to 25,000 won. However, the investment opinion remained to "buy" in that Handsome is making a growth breakthrough by expanding its import and licensing brand lineup and diversifying its beauty brand portfolio. The upside potential is 41.3%, and the previous trading day's closing price is 17,690 won.

"Handsome's sales in the second quarter of this year are expected to rise 0.5 percent on-year to 347.3 billion won and operating profit fall 21.7 percent to 4.5 billion won, recording sluggish performance following the previous quarter," said Heungkuk Securities Co.

Analysts say that the sluggish consumer economy and the increase in overseas travel are negatively contributing to fashion consumption spending. The increase in operating profit amid the previous year's level of external growth in the second quarter is largely attributable to the deterioration of the gross profit ratio due to the increased portion of sales at outlets. It was also cited as a negative factor that the launch of new brands and investment in stores will increase the burden of sales and government expenses such as advertising promotion and depreciation costs.

In terms of high interest rates and high prices, the business environment in the second half of the year is not easy. This year's annual sales rose 1.5% year-on-year to 1.6 trillion won and operating profit fell 7% to 93.4 billion won.

 

 

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