Shinyoung Securities on the 13th said APR is expected to continue growing on U.S. offline expansion and sales growth in Europe. It kept its Buy rating and raised the target price to 510,000 won from 440,000 won. APR's closing price in the previous session was 393,000 won.
Lee Gyo-seok, an analyst at Shinyoung Securities, said, "Concerns about a slowdown in U.S.-bound sales growth are being dispelled by offline expansion, and results continue to beat market expectations on growth in Europe-bound sales."
This year, APR's first-quarter revenue is projected at 582.8 billion won and operating profit at 145.1 billion won. Revenue rose 119% from a year earlier, and operating profit increased 166% from a year earlier.
Although U.S. revenue was strong in the fourth quarter last year due to Amazon Black Friday tailwinds, first-quarter revenue is also expected to come in at 248.7 billion won, similar to the prior quarter. Offline revenue with ULTA Beauty in the United States is estimated at around 20 billion won, up 4 billion won from the previous quarter.
As of Apr. 10, APR's entry into the major U.S. retail chain Target was made official, and online sales will begin with two hit SKUs (stock-keeping units). In addition, entry into two large retail chains is expected within the year, raising prospects for further offline expansion. In the United States, approximate store counts by chain are Walmart 4,600, Target 1,900, and Costco 640.
In Europe, revenue in other regions, including B2B, was projected at 181.5 billion won, up 199% from a year earlier.
Since the B2C business ramp-up began in March this year, APR's hit product lineup has occupied many spots in Amazon rankings in key countries, including the United Kingdom. In addition, with the completion of capacity expansion at small and midsize original design manufacturers (ODMs) responsible for producing the company's hit products, inventory shortages have been resolved, and B2B deliveries to local European partners (vendors) likely surged from the previous quarter.
The analyst said, "Sales growth in Europe, a market larger than the United States, has begun to materialize," adding, "On the back of global recognition, rapid growth will continue, and Europe's sales share will rise to 12%, similar to Japan."