Amorepacific Holdings Q1 Operating Profit Up 55%... Overseas Business Drives Growth

Operating Profit of Main Affiliate Amorepacific Up 62%
Global Rebalancing Driven by Cosrx Inclusion
Sales Double in US and Europe, Profitability Improves in Greater China

Amorepacific Holdings reported a consolidated operating profit of KRW 128.9 billion for the first quarter, representing a 55% increase compared to the same period last year. The strong performance is attributed to the rapid growth of its main affiliate, Amorepacific, in overseas markets.

According to the Financial Supervisory Service's electronic disclosure system on April 30, Amorepacific Holdings recorded sales of KRW 1.1648 trillion and operating profit of KRW 128.9 billion, up 15.7% and 55.2% year-on-year, respectively. The main affiliate, Amorepacific, posted sales of KRW 1.0675 trillion and operating profit of KRW 117.7 billion, up 17% and 62% over the same period. These figures far exceeded market expectations, which had forecast sales of KRW 1.233 trillion and operating profit of KRW 99.5 billion, marking an earnings surprise.

By region, Amorepacific’s domestic sales reached KRW 577.3 billion and operating profit KRW 49.4 billion, up 2.5% and 0.6%, respectively. While duty-free sales declined, the company strengthened its operations in online and multi-brand shop (MBS) channels, which contributed to the growth. Overseas sales surged to KRW 463 billion and operating profit to KRW 69.6 billion, representing increases of 40.5% and 120.5%, respectively. The share of overseas sales expanded from 36.9% in the first quarter of last year to 44.3% in the first quarter of this year.

The increase in both sales and operating profit in the overseas business was due to the inclusion of Cosrx and the sales growth of key brands. Sales in the United States for the first quarter reached KRW 157.2 billion, up 79%. This was driven by the inclusion of Cosrx and expanded sales centered on Laneige and Innisfree. Laneige achieved strong results with innovative new products in the lip and face categories, while Innisfree saw increased sales as its major lines such as Green Tea and Vita C attracted attention. Sales in Europe and the Middle East rose 219% year-on-year to KRW 55.3 billion. The inclusion of Cosrx and strengthened marketing for Laneige and Innisfree in MBS channels contributed to the sales growth.

The overseas segment also benefited from improved profitability in the Greater China region. Although sales in the Greater China segment fell 10% year-on-year to KRW 132.8 billion, the segment returned to profitability due to channel optimization and improved transactions on major platforms. Amorepacific stated, "Sulwhasoo strengthened its premium lines and Ryo expanded its scalp care portfolio, securing additional growth drivers." In Japan and the Asia-Pacific (APAC) region, sales surged 53% to KRW 127.8 billion. High sales were achieved through Qoo10's major promotion 'Megawari', and Laneige, Aestura, and Primera operated pop-up stores, contributing to the sales increase.

By brand category (luxury, premium, daily), luxury segment sales reached KRW 355.2 billion, showing a slight increase. This was partly due to the reclassification of cosmetics, but it is also believed that global campaigns and new product launches by major brands such as Sulwhasoo and Hera were effective. Sulwhasoo selected actress Lim Yoona as its new brand ambassador and launched a global campaign for the First Care Activating Serum.Hera introduced new products such as the Reflection Skin Glow Cushion, leading to a significant increase in cushion category sales. New lip makeup products also ranked first in luxury lipstick buzz volume.

The premium brand segment recorded KRW 103.2 billion in sales, an 18% decrease year-on-year. This decline was due to brand reclassification carried out in the second half of last year. The daily beauty segment posted sales of KRW 100.7 billion, up 6% from the previous year. The brand Ryo drove sales growth by launching the anti-aging care line 'Root:Gen'.

Among Amorepacific Holdings’ major subsidiaries, Innisfree recorded sales of KRW 52 billion and operating profit of KRW 4.7 billion. While sales dropped 14% due to a reduction in domestic offline road shops and decreased duty-free sales, operating profit surged 134% thanks to improved marketing costs. Etude entered new channels such as Daiso to expand its teenage customer base and collaborated with the idol makeup shop 'Kitts', resulting in a 3.4% increase in sales to KRW 30.9 billion. Operating profit fell 40% to KRW 3 billion. O’sulloc posted sales of KRW 25.4 billion and operating profit of KRW 1.7 billion. Sales grew by about 5% due to increased demand during the Seol (Lunar New Year) season, but operating profit dropped by 7%.

An Amorepacific representative stated, "We will pursue a global business restructuring focused on regions with high growth potential," adding, "We plan to strengthen distribution partnerships and try various business models in newly designated focus growth regions to secure continuous global growth drivers."