AmorePacific's Operating Profit Halved Compared to Its Peak Period

[Asia Economy Reporter Yujin Cho] Amorepacific recorded poor performance for the third consecutive year. Operating profit has halved compared to its peak of 848.1 billion KRW in 2016, and major affiliates such as Innisfree and Amos Professional all showed negative growth trends.

On the 5th, Amorepacific announced that its consolidated operating profit for last year was preliminarily estimated at 427.8 billion KRW, down 11.2% from the previous year. During the same period, sales increased by 5.7% to 5.5801 trillion KRW, while net profit decreased by 37.2% to 210.4 billion KRW.

Amorepacific’s operating profit has halved compared to the peak in 2016, continuing a poor performance trend for three consecutive years. This is due to the ongoing impact of the THAAD retaliation on its key growth driver, the China business.

The company explained, "Sales increased due to growth in domestic channels such as online and multi-brand shops, but operating profit decreased due to expanded overseas investments."

Major affiliates including Amorepacific, which operates over 40 brands such as Sulwhasoo, Hera, and IOPE, as well as Innisfree (-22%) and Amos Professional (-2%), experienced negative growth. Etude’s sales decreased by 18%, and it recorded an operating loss of 18.5 billion KRW. Poor sales in duty-free channels and road shops in major tourist districts negatively affected the performance.

Overseas business sales showed slight growth. The Asia region business grew by 5% compared to the same period last year. This was the result of expanding the portfolio through new product launches centered on the five major global brands (Sulwhasoo, Laneige, Mamonde, Innisfree, Etude House) and collaboration with global business partners.

The North American business performed well with a 38% increase. Along with continuous sales expansion of Laneige, Innisfree and Primera entered Sephora in the U.S., and Innisfree’s entry into Canada actively strengthened the growth foundation.

Amorepacific plans to diversify its channel portfolio in overseas markets this year to lay the groundwork for performance improvement.

Amorepacific stated, "We are strengthening brand competitiveness by operating various entry channels in the Asian market, and in the North American market, we are considering utilizing new channels to expand sales of existing major brands."

Additionally, in the European market, the company is preparing for a resurgence in the skincare sector by utilizing multi-brand shops and plans to actively collaborate with various global business partners.

This content was produced with the assistance of AI translation services.