Amorepacific posts 191.1% growth in Q1 profit, recovers in China

South Korea’s cosmetics giant Amorepacific Group reported a sharp turnaround in revenue and operating profit for the first quarter of 2021.

The group said on Apr. 28 that its first-quarter revenue recorded 1.39 trillion won ($1.25 billion), up 8.5% from the same period last year, and operating profit was 197.7 billion won ($178 million), up 191.1%.

The revenue gain was largely driven by the overseas segment, which increased by 19.6% to 447.4 billion won ($402 million), thanks to sales recovery in China. Its domestic revenue during the same period increased by 6.9% to 813.5 billion won ($732 million).

The company said that the revenue generated in the Chinese market in the first quarter was up by more than 30% compared to that of Q1 2020. Not only did the sales of its flagship brand Sulwhasoo soar in China on International Women’s Day on Mar. 8, but its online channel in the country also showed a fast rebound.  

On the other hand, Amorepacific Group’s profit gain was mainly fueled by the performance in the domestic market. The group’s operating profit in the domestic segment increased by 44.7% to 123.5 billion won ($111 million), while the overseas segment made a positive turnaround to 52.3 billion won ($47 million) from a net loss.

By brand, more high-end Sunwhasoo lines saw sharp growth, as well as HERA, driven by the popularity of its new Signia Luminesource Radiance Firming Serum.

One of the group’s key subsidiaries, Innisfree was able to increase its operating profit by 88.2% to 9.5 billion won ($8.5 million), through profit model restructuring and streamlining of channels.

Amorepacific Group said that it will continue to push forward with digital transformation initiatives and streamline its business model. The focus of its business model will be on the online channel, powered by new partnerships with digital platforms in both domestic and overseas markets.

Health products and the fast-growing dermacosmetics segment will be its next growth drivers, the group added.

Write to Jeong-cheol Bae at bjc@hankyung.com
Daniel Cho edited this article.