Amore's US Expansion Strategy Works... 3Q Group Operating Profit Up 160%

Affiliate AmorePacific Operating Profit Up 277%
US Sales Surpass China Sales, Osulloc and Espoir Also Make Strides

Amorepacific Group posted triple-digit growth in operating profit year-on-year, driven by strong performance from its core affiliate Amorepacific. The explosive growth in overseas markets, particularly in the Americas, was a key factor. The advances of subsidiaries Espoir and O’sulloc also contributed to the improved results.

According to the Financial Supervisory Service’s electronic disclosure system on the 31st, Amorepacific Group recorded Q3 sales of 1.0681 trillion KRW, an 11% increase compared to the same period last year. Operating profit reached 75 billion KRW, up 160.5% from 28.8 billion KRW in the previous year.

The core affiliate Amorepacific posted sales and operating profit of 977.2 billion KRW and 65.2 billion KRW, respectively, marking increases of 9.9% and 277.7% year-on-year. The securities analysts’ estimates were 981 billion KRW in sales and 42.9 billion KRW in operating profit. While sales slightly missed the estimates, operating profit far exceeded expectations. This was thanks to the overseas market and the daily beauty segment turning profitable.

Looking at sales, domestic sales (534.5 billion KRW) decreased by 1.6% compared to the same period last year, but overseas sales (431.3 billion KRW) surged by 36%. As overseas sales grew significantly, their share of total sales expanded from 36% to 44%.

Within domestic sales, the luxury segment (Sulwhasoo, Hera, AP Beauty, IOPE, etc.) and daily beauty segment (Mise-en-sc?ne, Ryo, Illiyoon, etc.) grew compared to last year, but the premium beauty segment (Laneige, Hanyul, Mamonde, COSRX, etc.) declined. IOPE was reclassified into the luxury beauty segment, resulting in an absolute decrease in sales compared to last year. However, operating profit in the domestic cosmetics segment rose 102% year-on-year to 44 billion KRW, reflecting improved profitability in both online and offline channels.

Laneige Global Ambassador BTS Jin.
[Photo by Amorepacific]

Overseas sales benefited from a global rebalancing effect as the Americas market surpassed the Chinese market in sales. Amorepacific has long invested heavily in expanding beyond China to target the U.S. and European markets. Earlier this year, Giovanni Valentini, who has experience with Unilever and L’Or?al Group, was appointed head of the North American market. Sales in the Americas market grew 108% year-on-year to 146.6 billion KRW. Meanwhile, sales in the Greater China region shrank by 34% to 97.6 billion KRW.

Sales in the EMEA region, centered on Europe and the Middle East, reached 52.5 billion KRW, growing 340% over the same period, while sales in the Asia-Pacific (APAC) region, including Japan, increased 52% to 132.5 billion KRW. Thanks to this, the overseas segment turned profitable. An Amorepacific official explained, "Laneige and Innisfree achieved high growth in Western markets, and the Americas benefited from the COSRX acquisition. Although sales in China declined due to structural changes in major e-commerce channels and streamlining of offline stores, we are focusing on strengthening the foundation for qualitative growth."

Among Amorepacific Group subsidiaries, O’sulloc and Espoir showed notable performance improvements. Espoir performed well in the domestic multi-brand shop (MBS) channel, with sales and operating profit increasing 45% and 22%, respectively. They enhanced core category competitiveness by launching the ‘Be Glow Volume Cushion’ and ‘Eye Core Palette.’ O’sulloc expanded customer touchpoints, increasing sales by 10%, and improved profitability by 24% through marketing cost efficiency. On the other hand, Innisfree and Etude saw sales decline by 18% and 6%, respectively, due to reduced duty-free sales and offline roadshop downsizing as part of channel restructuring.

An Amorepacific Group representative said, "We are focusing on developing global hub markets such as the U.S., Japan, the U.K., and India. Through redefining business areas that require focus, such as optimizing distribution channels for core categories like derma, sun care, and hair care, we will secure continuous growth momentum."