THE WHAT? AmorePacific has reported its results for fiscal 2019. The K-beauty behemoth saw net profit plunge 37.2 percent year-on-year despite an uptick in revenue.
THE DETAILS Revenue rose 5.7 percent year-on-year, reaching KRW5.6 trillion, while operating profit was down 11.2 percent to KRW427.8 billion.
The company’s domestic business, however, performed well, with operating profit up 12.6 percent to KRW319.5 billion driven by its luxury division, where Sulwhasoo led the charge. The premium portfolio also performed well with Laneige, IOPE and Hanyul all singled out for their booming skin care sales.
For the overseas business, however, it was a different story, with operating profit down 49.7 percent as increased marketing expense and investments in new markets and channels hit the bottom line.
THE WHY? AmorePacfic’s two sets of results are like chalk and cheese, with growth in the domestic business all but wiped out by a decline in the company’s European portfolio (which includes the French brand Goutal) and increased costs in the overseas division. Chairman and CEO Suh Kyung-bae was, however, optimistic that the company’s investment would pay off in 2020, stating in his New Year’s address, “We must place customers at the center of all our thoughts and actions… let’s make this year a year of enjoying the journey of changing the world through beauty and making our customers and markets excited.”