"HANDSOME's Heavy Clothing Sold Well in Chilly September Weather"... Target Price Raised

[Financial News] iM Securities maintained its Buy rating on HANDSOME, saying that the company's earnings improvement would continue, driven by a recovery in apparel sales and growth in new brands. It raised the target price from 25,000 won to 28,000 won.
On the 29th, iM Securities projected HANDSOME's third-quarter revenue at 332.1 billion won, up 7.3% from a year earlier, and operating profit at 9.2 billion won, an increase of 271.1%.
Jang Ho, an analyst at iM Securities, said, "The first factor behind the earnings improvement is strong fall and winter (FW) apparel sales. Sales of FW apparel with higher average transaction values and profit margins increased, particularly around mid-September, when the weather turned colder than usual."
Growth in new overseas brands is also expected to support the earnings improvement. HANDSOME has introduced a total of 12 overseas fashion brands since 2022, and their combined sales from January through August this year were estimated to have increased 50% from the same period a year earlier.
Over the medium to long term, the operating environment was viewed positively in three respects: improved profitability, a stronger product portfolio, and overseas expansion of in-house brands. HANDSOME accelerated discount sales and other measures to reduce its inventory burden, cutting inventory assets by 8% year on year as of the end of June 2026. In addition, as depreciation for stores opened between 2022 and 2024 ends sequentially, the resulting fixed-cost savings are expected to continue through 2028.
Analyst Jang said, "The exclusive U.S. brand 'SKIMS (pronounced \"Skims\")' plans to open nine department store locations by 2030, beginning with the Dosan Flagship Store in early 2027. Other brands, including the French premium running brand 'SATISFY (pronounced \"Satisfy\")', are also scheduled for additional launches in 2027." The analyst added, "HANDSOME's in-house brand 'SYSTEM (pronounced \"System\")' is also expanding its global presence through a pop-up at Harrods in London and by maintaining a top-tier position in men's contemporary fashion at Galeries Lafayette in Paris."
Stronger shareholder returns also drew attention. Analyst Jang explained, "Shareholder returns have been significantly strengthened by raising the proportion of standalone operating profit allocated to dividends from 15% to 20%, increasing the minimum dividend per share (DPS) to 800 won, and pursuing annual share buybacks and cancellations worth 10 billion won."


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