Today, AmorePacific Group (hereinafter referred to as “AmorePacific”) released its financial report for the second quarter of 2024. The report shows that in the second quarter, the group’s revenue amounted to 1.0057 trillion KRW, a year-on-year decrease of 2.4%; operating profit was 12.2 billion KRW, a year-on-year increase of 4.2%.
The group’s cosmetics subsidiary, AmorePacific, reported revenue of 904.8 billion KRW in the second quarter, a year-on-year decrease of 4.3%; operating profit was 4.2 billion KRW, a year-on-year decrease of 29.5%. In South Korea, second-quarter revenue fell by 7.8% to 511.9 billion KRW.
AmorePacific stated that the reduction in operating profit in South Korea was mainly due to a decrease in luxury brand sales. The operating profit from South Korean operations declined because of decreased sales in travel retail (which accounts for 16% of total South Korean revenue) and new business (door-to-door) channels. Additionally, increased marketing investments in growth channels (e-commerce, multi-brand stores) and premium product lines led to a loss in operating profit for everyday beauty products.
From an overseas perspective, AmorePacific’s overseas revenue in the second quarter were 381.5 billion KRW, a year-on-year increase of 2.5%. In Greater China, revenue were 107.7 billion KRW, a significant year-on-year decrease of 44.3%. In China, Sulwhasoo focused on the sales of the “Concentrated Ginseng” series by collaborating with KOLs to enhance the sales mix of high-end products. However, despite the operational losses in Greater China, AmorePacific stated that the revenue growth in other Asian regions mitigated the losses in Asia’s operating profit.
Excluding Greater China, revenue in other Asian regions and western regions (the Americas, Europe, the Middle East, and Africa) increased due to the consolidation of COSRX’s profits, recording double-digit profit margins.
In terms of business segments, AmorePacific’s luxury beauty brand segment (Luxury) achieved revenue of 281.1 billion KRW in the second quarter, a year-on-year decline of 6.8%. AmorePacific noted that the decline in this segment’s performance was mainly due to decreased revenue from travel retail and new business (door-to-door) channels, and a decrease in luxury cosmetics sales. However, activities to strengthen growth channels led to increased sales in multi-brand stores and online sales.
The premium beauty brand segment (Premium) saw a revenue increase of 3.5% to 121.7 billion KRW. AmorePacific stated that the performance of this segment improved due to continued growth in multi-brand stores and online channel sales of major brands like Laneige and Aestura. Overall premium business revenue increased with the consolidation of COSRX sales.
Among its brands, both Innisfree and Etude House experienced declines in revenue, with Innisfree and Etude House sales dropping by 13.4% and 10.3%, respectively. Notably, although Innisfree’s sales declined, its operating profit turned from a loss to a profit, going from a loss of 800 million KRW to a profit of 1.3 billion KRW. Meanwhile, sales of Espoir, Amos Professional, and Osulloc increased by 15.3%, 6.8%, and 11.8%, respectively.
