Handsome shares soar on shareholder return plan, earnings optimism

Share price surges after September shareholder return disclosure; Time, System push global expansion while three overseas brands set to launch

The finale of the Time 2027 Spring/Summer presentation held at Théâtre du Châtelet in Paris, France, on Oct. 5 (local time) [Handsome Time]

Handsome, a fashion subsidiary of Hyundai Department Store Group, has seen its share price climb on the back of shareholder return efforts and improving earnings expectations, with market targets rising in step.

According to Korea Exchange, Handsome shares opened Monday up 0.47 percent from the previous session at 21,400 won ($16) and continued to advance. The stock gained strong momentum after the company's shareholder return disclosure gave it a catalyst to shed its long-standing undervaluation.

The share price stood at 16,060 won at the close on Sept. 17 — the day before the shareholder return plan was announced — then jumped 10.4 percent to 17,730 won the following day. By Oct. 2, the stock had surged 37.3 percent to 22,050 won in just nine trading sessions. It has since traded in the 21,000–22,000 won range.

Handsome disclosed its shareholder return policy for 2026–2028 on Sept. 18. The company raised the dividend funding base from at least 15 percent of standalone operating profit to at least 20 percent, and lifted the minimum dividend per share from 750 won to 800 won. It also committed to buying back and canceling 10 billion won worth of treasury shares annually. This year's tranche is to be purchased by Oct. 22 and canceled on Nov. 6.

Securities firms have responded positively. All five brokerages that issued research notes after Sept. 18 gave a "buy" recommendation, and four raised their target prices. Hanwha Investment & Securities set the highest target, lifting its price objective 29 percent from 28,000 won to 36,000 won. Heungkuk Securities and iM Securities raised their targets to 28,000 won, while NH Investment & Securities moved its target to 27,000 won. Daishin Securities kept its target at 30,000 won.

Analysts highlighted the expanded scale of the shareholder return program. Hanwha Investment & Securities estimated the new policy would roughly double Handsome's total shareholder return ratio from around 20 percent to about 40 percent. Park Jong-ryeol, a researcher at Heungkuk Securities, estimated this year's shareholder return ratio at 36.4 percent, saying the company had "set an example of shareholder return expansion."

Jang Ho, a researcher at iM Securities, estimated dividend yields of 4.2 percent this year and 4.9 percent next year based on the Sept. 28 closing price, and said there was room to raise the dividend per share further given that the company had paid above its dividend benchmark in 2024 and 2025. Yu Jeong-hyeon, a researcher at Daishin Securities, described the move as "an effort to escape chronic undervaluation despite solid earnings and to build market trust as a shareholder-friendly company."

The exterior of Kith Seoul, Handsome's luxury lifestyle select shop in Seongsu-dong, Seoul [Handsome]

Expectations of improved earnings also underpinned the higher price targets. The five brokerages estimated Handsome's third-quarter operating profit at between 7.4 billion and 10.4 billion won, roughly three to four times the year-earlier figure. Jeong Ji-yun, a researcher at NH Investment & Securities, said September sales — when the fall-winter season kicked into full gear — had recovered to double-digit growth, and that gross margins would also improve as the company worked down first-half inventory.

Progress in Handsome's core businesses has also been evident. The company is pursuing two parallel strategies: building global brand recognition around its flagship labels Time and System, and expanding its portfolio of imported foreign fashion brands.

The global wholesale operations of Time Paris and System Paris, both showcased at Paris Fashion Week, have drawn particular attention. Time Paris became the first Korean ready-to-wear label listed on the official women's Paris Fashion Week calendar, a distinction it has held since March. The presentation held in Paris this month marked the brand's second consecutive appearance at Paris Fashion Week.

System Paris is expanding its overseas retail network. The brand opened a store at Galeries Lafayette in Paris in January, and launched a pop-up at Harrods in London last month. An expansion into Asia is also planned for next year.

Newly introduced foreign brands have also contributed to earnings. Since 2022, Handsome has brought in 12 overseas fashion brands, whose cumulative sales from January through August this year rose 50 percent from a year earlier. iM Securities estimated that third-quarter product-segment sales would grow 14.1 percent to 102.8 billion won ($76.8 million), with a gross margin of 63.4 percent.

Handsome plans to sign contracts this year to introduce three new overseas brands to South Korea, including Kim Kardashian's Skims. Skims is set to open a flagship store near Dosan Park in Gangnam-gu, Seoul, in the first half of next year. The company also plans to expand the total number of stores carrying Skims and the other new foreign brands from 60 currently to 90 by the end of next year.

spa@heraldcorp.com