On April 29th, Amorepacific Group (referred to as “Amorepacific”) released its financial report for the first quarter of 2024. The report showed that the group’s sales for the first quarter amounted to 1.0068 trillion Korean won ($731.4 million), a decrease of 0.2% compared to the previous year. Operating profit was 83 billion Korean won ($60.3 million), an increase of 1.7% compared to the previous year.
Amorepacific’s subsidiary, Amorepacific Pacific, reported sales of 911.5 billion Korean won ($662.22 million) for the first quarter, a decrease of 0.2% compared to the previous year. The operating profit was 72.7 billion Korean won ($52.8 million), a 12.9% increase compared to the previous year. Among them, sales in the Korean region for the first quarter increased by 2.1% to 563.6 billion Korean won ($409.4 million), and operating profit increased by 27.8%.
Amorepacific stated that the increase in operating profit in the Korean region was mainly due to the improved operating profit of high-end cosmetics brands such as Sulwhasoo. In addition, the double-digit growth in travel retail sales also accelerated the improvement in profit margins. Although there has been an improvement in the high-end product structure, the operating profit of the daily beauty business decreased due to increased marketing expenses.
Looking at the overseas business, Amorepacific’s sales in overseas regions for the first quarter amounted to 336.8 billion Korean won ($244.7 million), a decrease of 2.4% compared to the previous year. Among them, sales in China decreased by 19.3% to 148.2 billion Korean won ($107.7 million). Amorepacific stated that the operating profit in the Asian region remained at a similar level to last year, but the operating loss in the Chinese region affected it. Despite a decline in revenue in other Asian regions outside of Greater China, the operating profit margin in that region remained at a relatively high single-digit level through profit-oriented business operations.
In terms of business segments, the Luxury division of Amorepacific achieved sales of 323.1 billion Korean won ($234.7 million) in the first quarter, a 4.2% increase compared to the previous year. Amorepacific pointed out that the performance increase in this division was mainly driven by the sales of Sulwhasoo and Hera. The Premium division achieved a sales increase of 10.4% to 126.1 billion Korean won ($91.6 million). Amorepacific stated that the performance increase in this division was attributed to the outstanding sales performance of multi-brand stores and domestic e-commerce channels, as well as the sales of major brands such as Laneige and Aestura.
Among its brands, there was a decline in operating profit for Innisfree, Etude House, Espoir, and other brands. Specifically, Innisfree and Espoir experienced a decline in operating profit by 65% and 66% respectively. Amorepacific stated in the financial report that the decline in Innisfree’s operating profit was mainly due to a decrease in income resulting from the restructuring of the sales channel business, while the decline in Espoir’s operating profit was due to increased marketing investments in brand promotion activities.
