[Click eStock] "Amorepacific, Q1 Earnings Slump Inevitable Due to COVID-19"

[Asia Economy Reporter Koo Eun-mo] Hanwha Investment & Securities forecasted that Amorepacific's first-quarter performance this year will inevitably be hit as the impact of the novel coronavirus disease (COVID-19) becomes more pronounced.

On the 13th, Hanwha Investment & Securities estimated that Amorepacific's consolidated sales for the first quarter of this year would decrease by 24.8% year-on-year to 1.0909 trillion KRW, and operating profit would drop by 68.3% to 59.1 billion KRW. Researcher Son Hyo-joo of Hanwha Investment & Securities stated in the report, "Domestic cosmetics sales are expected to decline by 29.3% year-on-year to 558.2 billion KRW, and operating profit is projected to fall by 64.8% to 41.4 billion KRW, as sales across all channels except online deteriorate, resulting in poor performance."

The poor performance is expected to continue into the second quarter. Researcher Son said, "Domestic channels excluding China and duty-free stores may recover within the second quarter, but the impact on duty-free stores, which account for the largest share of performance, will persist due to travel restrictions and self-quarantine measures in various countries," and added, "The effects from the US, Europe, and other Asian countries are also expected to continue through the second quarter."

He emphasized that attention should be paid to the company's strategic direction at this point when the short-term performance deterioration is already becoming visible. Researcher Son explained, "Amorepacific plans to quickly streamline underperforming offline stores and transform them into growing channels through the COVID-19 crisis," adding, "How quickly this strategic direction materializes will be a crucial factor in assessing the company's future value." If qualitative growth progresses rapidly, the speed of performance improvement after the COVID-19 situation subsides could accelerate significantly.

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