[Special Stock] Shinsegae Inter Weakens on Q3 Earnings Below Expectations... New Low

Shinsegae International is experiencing a decline amid expectations that its third-quarter performance this year will fall short. It recorded a 52-week low during intraday trading.

As of 9:21 a.m. on the 23rd, Shinsegae International is trading at 12,490 KRW, down 290 KRW (2.27%) from the previous day. This marks a 52-week low.

The forecast of weak third-quarter earnings is believed to have impacted the stock price. On the same day, NH Investment & Securities projected that Shinsegae International's third-quarter sales would decrease by 3% year-on-year to 307.5 billion KRW, and operating profit would decline by 3% to 5.9 billion KRW, falling short of the consensus (average securities firms' estimates). Researcher Jeong Ji-yoon of NH Investment & Securities stated, "Due to reduced consumption, demand for luxury goods has declined, making it difficult to expect a quick profit turnaround in the fashion business sector, which holds a portfolio of high-priced imported brands. However, cosmetics still present opportunities. From the fourth quarter, the company’s entry into the cosmetics market through its U.S. subsidiary and the consolidation of Amuse are valid factors for a performance rebound," she explained. Reflecting prolonged consumption weakness and slow earnings recovery beyond expectations, NH Investment & Securities lowered its 2024 and 2025 earnings per share (EPS) estimates for Shinsegae International by 15% and 19%, respectively, and consequently cut the target stock price by 19% to 17,000 KRW.