Corporate logo of Amorepacific (Amorepacific)
South Korea’s cosmetics giant Amorepacific Group said Thursday its first-quarter net profit plummeted on-year by 13.4 percent to 171.2 billion won ($134.6 million), as sales dropped in duty-free business and in the Asian market due to the coronavirus pandemic.
The group’s sales revenue decreased to 1.3 trillion won, down 9 percent in the cited period.
Amorepacific Group’s domestic sales, accounting for approximately 60 percent of the total sales, decreased by 9.9 percent to 732.8 billion won. Its net profit posted 112 billion won, down 10.6 percent from last year.
Driven by the stellar performance of Sulwhasoo, the company’s luxury brand, online sales within the country have grown more than 20 percent. But its duty-free business suffered a deep dive due to lockdowns, which have dragged down the overall sales, the company said.
Overseas sales dipped 6.1 percent to 419.9 billion won while its net profit plummeted by 19.5 percent to 42.1 billion won in the first quarter. In particular, Asian market, where Korean beauty brands have enjoyed an enviable position in the industry, took a hit with strengthened quarantine and social distancing measures.
Despite weak sales in Asia, North America has seen 63 percent growth in sales compared to 2021, mostly boosted by two brands -- Sulwhasoo and Laneige.
Among Amorepacific’s subsidiaries, Innisfree and Etude, the group’s road shop brands -- affordable cosmetics brands mostly located in small shops instead of department stores -- have seen dips in sales. The two have suffered from the drop in inbound tourists, the company said.
Innisfree’s sales dropped on-year by 19.3 percent to 71.8 billion won, while Etude logged 26 billion won, down by 7.3 percent.
An Amorepacific official said the company has had a hard time due to the prolonged COVID-19, but hopefully forecasts a rebound in the near future with the reopening of international borders.
By Byun Hye-jin (email@example.com