Late Heat Ruins Winter Sales... Hansome's Q4 Operating Profit Down 34%

Annual Operating Profit at 63.5 Billion KRW,
Down 36.8% Year-on-Year

Hansome recorded an operating profit of 20.9 billion KRW in the fourth quarter, showing a double-digit decline compared to the same period last year. This was due to sluggish sales of high-priced fashion products such as winter outerwear caused by abnormal weather conditions.

According to the Financial Supervisory Service's electronic disclosure system on the 7th, Hansome's operating profit for the fourth quarter was 20.9 billion KRW, down 34% from the same period last year. Sales amounted to 435.7 billion KRW, a decrease of about 4% during the same period, and net profit also fell 42% to 13 billion KRW. These figures are below market estimates (sales 444.8 billion KRW, operating profit 27.6 billion KRW).

On a cumulative basis, sales reached 1.4853 trillion KRW and operating profit 63.5 billion KRW, down 2.8% and 36.8% respectively compared to the previous year. Net profit was 43.3 billion KRW, halving from 81 billion KRW the previous year.

The main reason for the poor fourth-quarter performance was the warm weather. In October and November, when winter products are usually launched, abnormal weather conditions caused temperatures to rise to as high as 20 degrees Celsius, which did not lead to purchases of winter outerwear and coats. Hyundai Department Store's outdoor sales in October and November increased by only 1.4% and 2.8% respectively compared to the same months last year.

The domestic economic downturn also negatively affected fashion product consumption. Although Hansome expanded into overseas markets by entering a department store in Paris, France, investment costs increased during this process, leading to a decrease in operating profit.

A Hansome representative explained, "Sales and operating profit declined due to prolonged consumer sentiment contraction and the impact of abnormal weather. To improve performance, we will continue efforts to enhance management efficiency by eliminating inefficient sectors this year, while actively strengthening our global fashion market strategies and diversifying our portfolio."