AmorePacific, US Fills China's Vacancy... Q1 Operating Profit Up 13%

Sulwhasoo, Hera, Laneige Advance Domestically... Operating Profit Up 28%
Overseas Sales: Western Markets Up 40%, Asia Down 14%

Amorepacific recorded an operating profit of 72.7 billion KRW in the first quarter, achieving double-digit growth. This was largely due to a significant improvement in profitability in the domestic cosmetics sector, with duty-free channel sales showing double-digit growth. Although performance did not increase in overseas markets due to sluggishness in the Chinese market, sales in the US and Europe grew at double-digit rates, indicating that the company is rapidly securing market competitiveness.

According to the Financial Supervisory Service's electronic disclosure system on the 29th, Amorepacific recorded an operating profit of 72.7 billion KRW in the first quarter, a 12.9% increase compared to the same period last year. Sales amounted to 911.5 billion KRW, a slight decrease of 0.2% from 926 billion KRW in the first quarter of last year. By region, domestic sales were 563.6 billion KRW, and operating profit was 49.1 billion KRW, up 2.1% and 27.8% respectively from the previous year. Overseas sales were 336.8 billion KRW with an operating profit of 31.6 billion KRW. Sales decreased by 2.4%, while operating profit remained similar to last year.

In the domestic sector, the luxury and premium cosmetics segments showed remarkable growth. Luxury cosmetics sales increased by 4% to 323.1 billion KRW, and premium cosmetics sales rose by 10% to 126.1 billion KRW. The luxury segment benefited positively from expanded sales of the Sulwhasoo and Hera brands. In the first quarter, Sulwhasoo expanded its Jinseol lineup by launching the renewed 'Jinseol Water and Emulsion' and diversified its product portfolio with the introduction of 'Yoonjo Lip Balm' and 'Perfecting Lip Color.' Hera launched a global ambassador campaign by renewing its contract with global ambassador Jennie for the sixth consecutive year.

In the premium segment, key brands such as Laneige and Aestura increased sales mainly through e-commerce and MBS (multi-brand shops). Laneige conducted a rebranding campaign alongside new product launches, including the renewal of ‘Water Bank Cream,’ while Aestura, which relaunched the ‘Atobarrier 365 Cream,’ maintained its position as the top seller in Olive Young’s derma category, continuing its growth trend. Hanyul also showed meaningful results with its newly launched ‘Moonlight Yuzu Vita Tone-up Apple Zone Pad,’ which ranked first in Olive Young’s online mask category. However, the daily beauty segment showed somewhat disappointing results. Operating profit halved from 3.5 billion KRW to 1.7 billion KRW, due to decreased sales in global e-commerce channels for major growth brands such as Mise-en-sc?ne, Ryo, and Illiyoon.

The overseas sector showed a stark contrast between Asian and Western markets. In Western markets, operating profit in the Americas surged by 40% year-on-year to 87.8 billion KRW, and sales in the Europe, Middle East, and Africa (EMEA) region increased by 52% to 17.3 billion KRW. Amorepacific is focusing on Laneige and Innisfree to target Western markets, while Sulwhasoo is strengthening marketing efforts in the luxury market. Laneige was the standout brand in the first quarter, with sales of lip category and core skincare products in the EMEA market more than doubling compared to the first quarter of the previous year.

Conversely, the Asian market showed declining sales in both the Greater China and Japan markets. The Greater China market recorded 148.2 billion KRW, down 19% year-on-year, while sales in other Asian markets centered on Japan fell 4% to 83.5 billion KRW. The decline in the Greater China market was due to reduced inventory in key channels, leading to an overall sales decrease. In Japan, the performance drop was linked to channel restructuring by subsidiaries Innisfree and Etude.

Amorepacific plans to reorganize its global business landscape focusing on regions with high growth potential. The company aims to strengthen distribution partnerships and introduce various business models centered on regions with strong growth. An Amorepacific official stated, "We will continuously secure global growth engines," adding, "We will implement new customer relationship management (CRM) programs based on our customer base and promote a customer-centric transformation of our business structure."