Philips Van Huesen Reports Better Performance Than Pre-COVID Levels

[Asia Economy Reporter Ji-hwan Park] Kiwoom Securities evaluated that Philips Van Huesen's performance has improved significantly compared to the pre-COVID-19 period.

Philips Van Huesen recorded sales of $2.31 billion (approximately 2.6724 trillion KRW) in the second quarter of this year, significantly exceeding market expectations. This represents a 46.3% increase compared to the same period last year and an 11.2% increase compared to the previous quarter. Net profit reached $200 million.

Seongjin Ji, a researcher at Kiwoom Securities, said, "Although the reduction in retail store operations in some European regions due to the impact of COVID-19 continues, digital sales revenue increased by 35% year-on-year, raising the proportion of digital sales to 25%." In the North American region, retail sales remain sluggish due to a decrease in tourist inflow, but with reduced marketing and promotion expenses, the company's operating profit margin recorded 12.7%.

He analyzed, "Following the structural improvement strategy announced last quarter, the sale of non-core brands (Heritage) was completed," adding, "The completion of restructuring related to the sold brands contributed to profitability improvement."

The company projected through the second-quarter earnings announcement that third-quarter sales would increase by 11-13% year-on-year. Although the North American region is expected to be unable to recover to pre-COVID-19 performance levels within the year due to decreased tourist inflow, steady growth is expected to continue due to expanded sales in the European region.

Researcher Seongjin Ji said, "The earnings announcement showed a significant upward revision of the earnings per share (EPS) guidance," adding, "The guidance assumes delayed sales recovery in the North American region, increased logistics costs, and higher marketing expenses, so it is considered somewhat conservative." He emphasized, "As sales recovery has begun in the Asian region centered on China, performance growth is expected to continue in the second half of the year."