Amorepacific Group didn't grow, but it did beat expectations

Amorepacific Group headquarters in Yongsan District, central Seoul [AMOREPACIFIC GROUP]

Amorepacific Group beat expectations with a first quarter net profit of 132.2 billion won ($104 million), though still down 25.2 percent on year.

The company exceeded the FnGuide market consensus of 47.2 billion won.

Revenue fell 9 percent on year to 1.26 trillion won as duty-free sales fell, slightly lower than the market consensus of 1.33 trillion won.

Cosmetics subsidiary Amorepacific, 50.19 percent owned by Amorepacific Group, reported a net profit of 120.1 billion won in the first quarter: down 12.8 percent on year but still beating market expectations of 90 billion won in net profit. Revenue fell 7 percent to 1.17 trillion won, also lower than market expectation of 1.26 trillion won.

Amorepacific’s local sales dropped 9.9 percent on year to 732.8 billion won and overseas sales dropped 6.1 percent on year to 419.9 billion won.

Its online sales in Korea were strong, rising 20 percent on year, but the fall in duty-free sales was the main contributor to the overall drop in revenue, according to the company. Duty-free sales made up 34 percent of its total local sales in the first quarter of 2021, but fell to 24 percent this time around.

Outside of Korea, sales from Asian markets fell 10 percent on year to 379.6 billion won. China makes up for 70 percent of the Asian market, and sales from the country fell 10 percent due to the ongoing pandemic and lockdowns.

Sales from North American markets rose 63 percent on year, helped by the popularity of Sulwhasoo and Laneige products.

Revenue of Amorepacific’s budget cosmetics brand Innisfree fell 19.3 percent on year to 71.8 billion won, and its operating profit fell 64.2 percent to 3.4 billion won. The company again cited a decrease in overall duty-free sales for the drop.

Tea brand Osulloc saw high growth. Revenue rose 40 percent on year to 23.2 billion won and operating profit rose 156.8 percent on year to 4.3 billion won.

The company says its sales jumped due to rising online sales and tea gift sets selling well during the Lunar New Year holiday season, which fell on Feb. 1.

Amorepacific Group's shares rose 8.26 percent on Thursday to 51,100 won and Amorepacific's rose 9.2 percent to 178,000 won.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]