Amorepacific Group's net profit drops 29 percent on year

An employee enters Amorepacific Group’s headquarters in Yongsan District, central Seoul. [YONHAP]

Amorepacific Group reported a less-than-expected net profit of 32.3 billion won ($22.6 million) in the third quarter, down 29 percent on year, due to sales falling in China and duty-free businesses far from recovering.

The figure failed to beat analyst expectations of a 33.2-billion-won net profit compiled by FnGuide.

The company logged revenue of 1.02 trillion won, down 15.9 percent on year, below expectations of 1.1 trillion won.

Amorepacific, 50.19 percent owned by Amorepacific Group, logged a net profit of 21.8 billion won, down 43.3 percent on year.

The figure failed to beat analyst expectations of a 24.4-billion-won net profit.

Its revenue fell 15.6 percent on year to 936.4 billion won, lower than analyst expectations of a 967.5-billion-won revenue.

Amorepacific’s local sales fell 18.6 percent on year, with the company blaming a drop in duty-free sales. Despite the fall, it said e-commerce sales rose over 10 percent.

Its overseas sales fell 12.8 percent on year to 334.8 billion won. The company says the biggest cause is a 40 percent drop in Chinese sales, largely due to cosmetics consumption in the country falling. Country’s sales are more than 50 percent of its Asian market sales.

Although struggling in China, sales in North America rose 97 percent on year due to online sales via Amazon increasing. European sales rose 60 percent on year due to popularity of Laneige and Innisfree products.

Espoir sales rose 6.2 percent on year to 12 billion won. Operating profit jumped 1,348 percent on year to 1.1 billion won. The company said rising sales from Be Velvet helped.

Osulloc’s sales rose 30.6 percent on year to 19.8 billion won. Operating profit increased 173 percent on year to 2 billion won.

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