- Sales of KRW 1.2628 trillion, down by 9.0 % and operating profit down by 13.4 % to KRW 171.2 billion.
Amorepacific Group reported sales of KRW 1.2628 trillion and an operating profit of KRW 171.2 billion in Q1 2022, down 9.0 % and 13.4 % respectively from Q1 2021.
In Q1 2022, Amorepacific Group confronted business uncertainty in both Korea and around the world, due to the second wave of COVID-19. However, it has rather focused on strengthening its competitiveness with new innovative products and continued its growth in the online channel. In the North American market, among others, Sulwhasoo and Laneige showed good performance with a high sales growth rate. Main affiliates have focused on strengthening its competitiveness with products and continued its growth in the online channel. In total, sales in the cosmetics category were KRW 1.1506 trillion in Q1 2022.
The group’s main affiliate, Amorepacific recorded sales of KRW 1.1650 trillion, down by 7.0 % compared to the same period last year, and its operating profit went down by 10.4 %, to KRW 158 billion. In the Korean market, sales fell by 9.9 % to KRW 732.8 billion with the operating profit of KRW 112 billion, down by 10.6 %, and in the global market, the company saw sales of KRW 419.9 billion and the operating profit of KRW 42.1 billion, down by 6.1 % and 19.5 % respectively.
In the Korean market, Amorepacific saw over a 20 % growth in the online channel, but decreased sales in the travel retail channel resulted in a decline in the overall sales. The operating profit also went down due to increased spending on marketing.
Luxury brands saw a double-digit growth in the online channel through promotions including pre-releases of new products, but decreased sales in the travel retail channel resulted in a decline in the overall sales. Sulwhasoo Concentrated Ginseng Renewing Serum and Hera Sensual Powder Matte Liquid added to the brand's competitiveness and the growth of inner beauty brands has continued, led by Vital Beautie. Premium brands also put up a solid performance with a double-digit growth rate in the online channel, although the overall sales went down. Brands actively interacted with Millennials and Generation Z through actions such as the immersive interactive exhibition held by Laneige titled ‘Life Oasis 2.0’ and the Aestura ‘#Soothing Season 2’ campaign. New innovative products including Laneige Water Bank Blue Hyaluronic and Hanyul Tiger Edition strengthened the competitiveness at the brand level. Daily beauty brands grew online with their premium lineups: Mise-en-scène Salon 10 and Happy Bath Skin U, but the overall sales decreased as its offline sales went down due to the reorganization of its products portfolio for improving the profitability. They introduced new additions to their premium lineups including Ryo Vegan Bright Gray Hair Cover, Happy Bath Martini Skincare Perfume Body Wash and Illiyoon Red Itch Care.
In the global market, the second wave of COVID-19 brought about a sales decrease in Asian regions, resulting in a decline in the overall sales and operating profit. Nevertheless, leading brands including Sulwhasoo and Laneige put on a good show in the North American market and recorded 63 % increase in sales.
In China, sales went down by around 10 % in the midst of another wave of COVID-19, but Sulwhasoo focused on developing Concentrated Ginseng Renewing and showed a growth in the online channel thus proving its competitiveness in the Chinese market. In other Asian regions, overall sales decreased as social distancing continued, but main brands launched new innovative products including Sulwhasoo Concentrated Ginseng Renewing Serum and Laneige Water Bank to strengthen their brand competitiveness. In the North American market, leading brands drove a sales growth of 63 %. Laneige saw strong sales, particularly with Lip Sleeping Mask through successful online channel diversification while Sulwhasoo grew in both online and offline sales. In the European market, the overall sales went down as the sales of perfume brands declined. However, Laneige strengthened its competitiveness with strong sales in the online channel.
Main affiliates have continued to grow in online channels and focused on raising their competitiveness in core categories.
Innisfree focused on developing Black Tea Youth Enhancing Ampoule and Retinol Cica Ampoule to enhance its high-functionality products. However, decreased sales in the travel retail channel and increased marketing expenses led to a drop in both sales and operating profit. Etude strived to strengthen its competitiveness in core categories and as part of its effort, it introduced new products in collaboration with influencers, but the overall sales went down after it closed down some of its offline shops and sales in the travel retail channel decreased. The brand managed to return to profit with improved channel mix and reduction in fixed costs. Espoir put up a good performance in multi-brand shop and online channels with its new face makeup products and as a result, both sales and operating profit increased. In particular, the increased reverse overseas direct purchase in Japan was a bright streak on its global expansion. Amos Professional improved its competitiveness by introducing new products including vegan hair dye, which contributed to sales growth. It enhanced its clinic lineup portfolio and the relationships its brand Ayunche's holds with new salons encouraged strong growth. With high sales of the New Year gift set and premium tea set, and growth in the mall-in-mall platform, O’Sulloc saw a sharp rise in overall sales and as the share of the online channel in sales increased, operating profit went up.
This year, Amorepacific Group is carrying out three strategies: Strong Brand, Digital Transformation and Business Fundamentals Innovation under the management policy of Winning Together. For building a Strong Brand, Amorepacific is working to develop engine products, improve data-driven customer service and expand into new potential categories including dermocosmetics and wellness. For digital transformation, it is focusing on strengthening its capabilities in e-commerce, contents and community to win over a strong fandom and lay the foundation for future growth through digital technology. It is also pushing ahead with data-driven inventory optimization and empathetic ESG management for the goal of business fundamentals innovation.
[Amorepacific Group] (Unit: KRW 100 million / Growth: YoY growth rate)
※ Q1 2022 total sales of Amorepacific Group in the cosmetics category: KRW 1.1506 trillion
[Earnings of the main affiliate, Amorepacific] (Unit: KRW 100 million / Growth: YoY growth rate)
[Earnings of other affiliates] (Unit: KRW 100 million / Growth: YoY growth rate)