Misto Holdings (081660) Q4 2023 earnings summary

Executive summary

• Q4 2023 revenue was KRW 760.8bn, down 15.2% YoY, and operating profit was a KRW 41.4bn loss; FY23 revenue fell 5.1% and operating profit fell 30.2%.

• Performance reflected FILA channel recalibration and U.S. inventory liquidation, alongside lower Acushnet sales and higher personnel and marketing costs.

• The 2024 outlook targets revenue near FY23 levels and double-digit consolidated operating profit growth, supported by profitability improvements in FILA businesses.

Financial highlights

• FY23 revenue was KRW 4,006.6bn, down 5.1% YoY; gross profit rose 6.0% to KRW 3,109.5bn, with gross margin up 1.1 percentage points to 49.2%.

• FY23 operating profit was KRW 303.5bn, down 30.2%, and operating margin was 7.6%, down 2.7 percentage points; net income was KRW 153.1bn, down 67.3%.

• Q4 gross profit was KRW 388.5bn and gross margin was 51.1%, up 4.9 percentage points YoY; net income was a KRW 60.1bn loss vs. KRW 136.2bn profit in Q4 2022.

Outlook and guidance

• FY24 consolidated revenue target: -5% to +5% YoY; consolidated operating profit target: +30% to +40%, with growth expected from base effects and improved FILA profitability.

• FY24 revenue targets: FILA USA -5% to +5%, FILA Korea excluding design service fees 0% to +10%, global royalty -20% to -10%; Acushnet midpoint growth targets are +3.9% revenue and +5.0% adjusted EBITDA.

• FY24 operating guidance includes losses of KRW 60bn to KRW 40bn for FILA USA and KRW 15bn to KRW 5bn for FILA Korea excluding design service fees.