April 20, 2024

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The securities firm lowered the target price to 320,000 won (US$287.15) from 360,000 won saying that its duty-free sales in particular will slide by 10 percent. 

The number of inbound Chinese tourists this month has fallen drastically, and the duty-free stores and some brand outlets are having difficulties, said analyst Park Hyeon-jin. As the distribution channels that have been major contributors are underperforming, the growth of operating profit at home will be limited, added the analyst. 

Overseas operation will maintain a high 20 percent growth rate, offsetting the slow sales at home but the cosmetics company will not be able to remain untouched by the Chinese government’s ban on tour packages to South Korea, noted Park. 

The decline in tourists will hit the bottom in April or May, and the second quarter earnings will be hit harder, according to the analyst who added that the uncertainties will not be resolved until early May at the earliest. 

By Hwang You-mee (glamazon@heraldcorp.com)