[Why&Next]Operating Margins at 20%... Four K-Companies Captivating the World

KT&G, APR, Samyang Foods, and F&F
Companies with high overseas exposure outperform despite cost pressures
Domestic-focused firms stuck with single-digit margins

KT&G, which manufactures and sells cigarettes, cosmetics company APR, food company Samyang Foods, and fashion company F&F all share one key feature: last year they each posted an operating margin in excess of 20%. These companies, which increased their sales in overseas markets, avoided the domestic consumption slump and achieved high profitability, whereas companies focused on the domestic market saw their operating margins remain stuck in the low single digits.

According to a comparative analysis conducted by The Asia Business Daily on the previous year’s results of major consumer-goods manufacturers in food, cosmetics, and fashion as of February 12, 2026, the higher the share of overseas business in total sales, the higher the operating margin tended to be. Even within the same industry, the profitability gap widened between companies whose overseas sales account for more than half of their revenue and companies centered on the domestic market. In an environment of rising raw material prices, a strong won exchange rate, and continued pressure from labor and logistics costs, profit trends diverged depending on which markets the sales were generated in.

A foreigner holding a Buldak-bokkeum-myeon product. Provided by Samyang Foods.

Overseas sales up... soaring profitability at export-driven companies

In fact, most companies whose operating margins exceeded 20% derived more than 50% of their sales from overseas. APR posted sales of 1.5273 trillion won and operating profit of 365.4 billion won last year, for an operating margin of 23.9%. Samyang Foods reported sales of 2.3518 trillion won and operating profit of 523.9 billion won, resulting in an operating margin of 22.3%. KT&G generated sales of 6.5795 trillion won and operating profit of 1.3495 trillion won, maintaining an operating margin of 20.5%. Analysts say that by frontloading brands that were able to maintain relatively high selling prices in global markets, these companies offset a large portion of their domestic cost burden, which translated into high margins.

APR expanded sales through overseas online channels, focusing on its own brands such as Medicube. With a high proportion of direct sales that shorten distribution stages, it faces relatively low promotional and distribution fee burdens, and by maintaining mid-range price points in overseas markets it has also secured strong pricing power. APR’s overseas sales share expanded from 55% in 2024 to 80% last year, and its overseas sales reached 1.2258 trillion won in 2025, up 207% from a year earlier.

Samyang Foods likewise saw profitability improve on the back of the global success of its Buldak brand. As awareness of Buldak-bokkeummyeon grew in the United States, China, and Southeast Asia, overseas sales increased rapidly, while export prices remained at levels higher than in the domestic market. Overseas sales accounted for nearly 80% of Samyang Foods’ total sales last year.

KT&G also reaped clear benefits from expanding its overseas cigarette business. Last year, overseas cigarette sales jumped 29.4% from a year earlier to 1.8775 trillion won. Overseas sales accounted for 54.1% of total cigarette sales, surpassing the domestic share for the first time.

By contrast, companies whose operating margins remained in the low single digits saw only a modest profit relative to sales. LG Household & Health Care posted sales of 6.3555 trillion won last year, but operating profit was only 170.7 billion won, resulting in an operating margin of just 2.7%. Intensifying competition in the domestic cosmetics market and sluggish performance in duty-free and door-to-door sales channels weighed on results, and its overseas business has been slow to recover as it has not yet broken away from its past dependence on China, according to analysts.

Lotte Wellfood also recorded sales of 4.2160 trillion won and operating profit of 109.5 billion won, for an operating margin of 2.6%. Given the nature of processed foods, the company is highly sensitive to fluctuations in raw material prices and logistics costs, while its ability to raise prices has been limited, which has suppressed profitability. Although it is expanding its overseas business, the share is still not large enough to offset its cost burden, observers say.

APR and Samyang Foods thrive as domestic-focused firms struggle

The gap was also clear in the food sector. Orion posted sales of 3.3324 trillion won and operating profit of 558.2 billion won, resulting in an operating margin of 16.7%. Its overseas subsidiaries in countries such as China and Vietnam drove its performance. By contrast, Lotte Chilsung Beverage recorded sales of 3.9711 trillion won but operating profit of only 167.2 billion won, leaving its operating margin at 4.2%. Ottogi likewise reported sales of 3.6745 trillion won and operating profit of 177.2 billion won, for an operating margin of 4.8%, and Binggrae also remained stuck at an operating margin in the 5% range.

The same pattern appeared in the cosmetics and fashion sectors. Amorepacific posted sales of 4.2528 trillion won and operating profit of 335.8 billion won, for an operating margin of 7.9%, while Aekyung Industrial managed only 3.2%. By contrast, although APR’s sales scale is relatively small, its operating profit exceeded 360 billion won, delivering profitability that outstripped that of the major cosmetics companies.

In fashion, the fashion division of Samsung C&T posted an operating margin of 8.5%, and LF recorded 9.0%, whereas F&F far exceeded the industry average with a margin of 24%. F&F reported sales of 1.9339 trillion won and operating profit of 468.5 billion won last year, for an operating margin of 24.2%. Overseas sales account for 59% of its total. F&F is maintaining stable growth in its overseas business, which is centered on China. As MLB store optimization progresses in the Chinese market, sales per store are increasing. Discovery Expedition is also viewed as having established itself in major commercial districts such as Beijing and Shanghai.

Industry insiders say this polarization in profitability will be difficult to resolve in the short term. Overseas markets are no longer just an option for top-line growth but are now a factor that directly affects profitability. There are also forecasts that the gap between companies whose overseas sales already account for more than half of total revenue and those that do not will likely widen further.

A distribution industry official said, "Even with the same level of sales, operating profit can differ significantly depending on where those sales are generated," adding, "The share of overseas sales is becoming an important criterion for assessing a company’s competitiveness."