Sharp Increase Expected
T
he Youngone Corporation saw an unexpected growth in operating profits in the fourth quarter last year, up 46.8 percent to 23.5 billion won (US$21.18 million) from the same period a year earlier. Sales, meanwhile, decreased 2.7 percent to 288 billion won (US$259.6 million).
Na Eun-chae, an analyst at Korea Investment & Securities, said, “Due to the inventory losses in domestic brand businesses and the discharge of one-off costs, the rate of cost to sales fell to 75.5 percent from 80.4 percent year-on-year. Since Q1 and Q4 are considered slow seasons, it had the low level of contribution to annual profits. However, the direction was positive enough.”
The sales of the company are expected to increase sharply this year.
Na also said, “Thanks to the recovery of the demand and the extensions last year, sales grew nearly 18 percent, given in US dollars, and the profitability also improved compared with the previous year. This year, the company will see a growth in sales by 50 percent and in operating profits by 31 percent from the previous year.”
Park Hee-jin, an analyst at Shinhan Investment, said, “Even though there was no increase in unit costs, it reduced product delivery costs, which affect the cost price. Also, the rate of cost to sales increased by 5 percentage points, since the merit prices of subsidiaries abroad reflected in the third quarter.”
Meanwhile, Youngone Corp., a major producer of active wear and outdoor sports gear brand North Face, has been accelerating the globalization of the company in earnest from 2013.
The group took over not only a U.S. outdoor apparel maker Outdoor Research last year, but also Swiss bicycle manufacturer Scott Corporation in January.