Online and Overseas Soar... Amore's Q1 Earnings Rebound Success

Group Operating Profit Up 191%
Amorepacific Also Up 189%
Luxury Brands Like Sulwhasoo Popular
Overseas Market Operating Profit Turns Positive

Estra Operating Profit Up 206%
Innisfree, Espoir, and Other Major Subsidiaries See Significant Profit Improvement

[Asia Economy Reporter Seungjin Lee] Amorepacific Group has shaken off the COVID-19 slump from last year and succeeded in rebounding in the first quarter of this year. This is due to the visible results of “strengthening brand cultivation and digital transformation,” which Chairman Seo Kyung-bae of Amorepacific Group identified as key tasks for this year.

Amorepacific Group announced on the 28th that it recorded sales of 1.3875 trillion KRW and an operating profit of 197.7 billion KRW in the first quarter of 2021. These figures represent increases of 8.5% and 191.1%, respectively, compared to the same period last year.

The leading affiliate, Amorepacific, posted sales of 1.2528 trillion KRW, up 10.8% year-on-year, and an operating profit of 176.2 billion KRW, up 189.2%. In the domestic business, sales rose 6.9% to 813.5 billion KRW, and operating profit increased 44.7% to 125.3 billion KRW. Overseas sales grew 19.6% to 447.4 billion KRW, and operating profit turned positive at 52.3 billion KRW.

High Online Growth and Recovery of Sales in China

The rebound in Amorepacific Group’s performance is thanks to high growth in online channels and sales recovery in China. Strong sales of luxury brands such as Sulwhasoo also significantly improved operating profit. The group’s total cosmetics sales, excluding daily beauty products, amounted to 1.2954 trillion KRW.

Domestically, online sales increased by more than 30%, and growth in duty-free channels was prominent. The brand portfolio was reorganized around luxury brands, leading to increased operating profit in the cosmetics sector. Luxury brands showed strong growth centered on Sulwhasoo, which focused on nurturing the Jaumsaeng and Jinsul lines. Hera also strengthened its luxury skincare category with the launch of the Signia Luminesous Radiance Firming Serum.

Premium brands achieved over 10% growth in online sales by fostering key products such as Laneige’s Radian-C Cream. The influencer collaboration brand “Soluderm” was launched, and innovative products like Mamonde Probiotics Ceramide Cream and Hanyul Dalbit Yuja CTM Serum were introduced, enhancing brand competitiveness. Daily beauty brands such as Mise-en-sc?ne, Labo H, and Illiyoon focused on securing growth engines centered on premium hair and body lines.

In overseas markets, total sales grew by 20%, and operating profit turned positive. In China, high performance was achieved centered on Sulwhasoo during the “3.8 Women’s Day,” and strong performance in online channels led to mid-30% growth in total sales. Sulwhasoo’s sales were strong across the Asia region, and in Thailand and Vietnam, sales grew centered on Sulwhasoo and Laneige.

In the North American market, sales expanded through online channels such as Amazon, and Laneige’s newly launched Lip Treatment Balm showed strong sales. In Europe, Innisfree entered Sephora, and total sales grew mainly through multi-brand shop channels.

Improvement in Major Subsidiaries’ Profitability

In the first quarter of this year, Innisfree significantly improved its operating profit through offline channel restructuring and an online share expansion strategy. Sales were 89 billion KRW, down 17.2% year-on-year. However, operating profit grew 88.2% to 9.5 billion KRW.

Estra recorded sales of 29.7 billion KRW, up 23.7%, driven by high growth in key lines such as Atobarrier. Sales of high-margin products expanded, resulting in operating profit of 5 billion KRW, up 205.9%. Etude recorded sales of 28.1 billion KRW (-18.7%) as it restructured duty-free and offline channels, but the deficit narrowed due to fixed cost reductions from downsizing directly operated stores.

Espoir posted sales of 12.5 billion KRW (-9.1%) due to a decline in offline sales, and operating profit turned negative due to increased marketing expenses. Amos Professional recorded sales of 17 billion KRW (-8.8%) and operating profit of 4.2 billion KRW (-4.4%) as it reduced duty-free channels to shift its business focus to salons. O’Sulloc expanded online sales centered on gift sets, achieving sales of 16.6 billion KRW (+31.2%) and operating profit of 1.7 billion KRW, successfully turning a profit.

This year, Amorepacific Group plans to continue its management strategy of strengthening brands, digital transformation, and improving business structure. To this end, it will nurture “engine products” that reflect the unique value and spirit of the times of each brand, accelerate collaboration with domestic and international digital platforms, and maintain growth in online channels. In addition, it will continue efforts to improve profitability through business structure improvements and foster new growth engines such as health functional foods and derma cosmetics.

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