Yesterday (January 30th), Amorepacific Group released its financial report for the fourth quarter and full year of 2023. In 2023, the group’s sales reached 4.02 trillion Korean won ($3.01 billion), a decrease of 10.5% compared to the previous year, and operating profit was 152 billion Korean won ($113.9 million), a decrease of 44.1%.
In the fourth quarter of 2023, the group’s sales were 1.018 trillion Korean won ($763.1 billion), a decrease of 14% compared to the same period last year, and operating profit was 29.9 billion Korean won ($22.41 million), a decrease of 62%.
The total sales of the group’s cosmetics companies in the fourth quarter were 133.3 billion Korean won ($99.92 million), a decrease of 2.5% compared to the same period last year, and operating profit decreased by 67% to 6.6 billion Korean won ($4.95 million).
Due to the decline in tourism retail channels and online sales, Amorepacific’s flagship subsidiary Amorepacific domestic sales in South Korea in 2023 decreased by 14.4% to 2.2108 trillion Korean won ($1.66 billion) compared to the same period last year. The operating profit of the cosmetics business decreased, and the overall operating profit of the domestic business decreased by 34% due to the restructuring of the daily chemical division with a focus on high-end product portfolios, which increased operating profit. On the other hand, sales in the Multi-Brand Stores (MBS) channel grew by over 40%. Although there was a double-digit decline in online sales, pure domestic online sales still achieved growth, capturing the largest market share in the cosmetics e-commerce sector.
In terms of overseas business, in 2023, overseas sales were 1.3918 trillion Korean won ($1.04 billion), a decrease of 5.5% compared to the previous year. Asian sales decreased by 16%, with China’s sales declining by over 20%. Additionally, due to strong sales of Laneige, revenue in the Americas increased by 58%. By expanding business in new countries (UK, Middle East), revenue in Europe, Middle East, and Africa (EMEA) region grew by 62%.
Due to losses in the Chinese business, Asia’s total operating profit turned into a loss, but operating profit in other regions of Asia increased. Operating profit in North America and the EMEA region increased with the growth in revenue.
As for other subsidiaries, the focus is on launching new products and increasing marketing investments to ensure future growth engines. Sales and operating profit of Innisfree decreased due to channel restructuring and increased marketing investments. Espoir achieved overall sales growth in the Korean e-commerce channel, but operating profit decreased by 15.8% due to hosting marketing activities. Etude House saw strong sales of core products like Curl Fix Mascara, targeting millennials and Gen Z customers, with overall sales increasing by 4.7% to 111 billion Korean won ($83 million).
Amorepacific stated that in the future, the group plans to create higher brand value through customer-friendly content development and strengthening engine products. The next step is to restructure the global business landscape with a focus on high-growth potential regions. The group also plans to strengthen distribution partnerships centered around newly established intensive growth areas and explore various business models to ensure sustainable global growth engines.
