[THE INVESTOR] Hyundai Department Store will more than satisfy fourth-quarter earnings expectations, said Korea Investment and Securities on Dec. 15, maintaining a “buy” recommendation and raising the target price to 130,000 won (US$119.31) from 110,000 won.
Its operating profit will rise 8.8 percent on-year to 132.0 billion won, estimated analyst Yeo Yeong-sang. Its quarterly earnings have been sliding since the fourth quarter last year and this figure is encouraging, noted the analyst.
Since the cold weather began in November, apparel sales have led the growth and revenue from existing stores in November rose 6 percent on-year. It will rise approximately 4 percent this month, noted Yeo.
Department stores earnings grow fastest when consumption picks up and if the growth is led by apparel sales, profits improve faster, according to the analyst, forecasting that sales of menswear and womenswear as well as outdoor apparel will hike 15 percent in the fourth quarter and will remain on an upturn into the first quarter next year.
It is starting duty-free business at the end of 2018 and considering the prime location of the store, at COEX in southern Seoul, it will be able to contribute to earnings, he added.
By Hwang You-mee (firstname.lastname@example.org)