Amorepacific Returns to 4 Trillion Won Revenue Club After Three Years

Amorepacific (090430.KS), South Korea's largest cosmetics company, recorded approximately 4.6 trillion won ($3.4 billion) in revenue last year, returning to the "4 trillion won revenue club" for the first time in three years. The company had previously succeeded in overseas expansion centered on China but saw its performance stagnate after being hit directly by the THAAD (Terminal High Altitude Area Defense) dispute. However, with sales growing evenly across major markets including the United States and Europe, the company delivered earnings that exceeded securities analysts' expectations. Amorepacific shares rebounded in after-hours trading following the regular session close. The K-beauty industry has recently been recognized for achieving world-class competitiveness across its entire ecosystem, from ODM (Original Development Manufacturing) companies to distributors and individual brands.

Amorepacific Group announced on Thursday that its consolidated revenue rose 8.5% to 4.6232 trillion won last year, while operating profit jumped 47.6% to 368 billion won. Revenue exceeded the consensus estimate of 4.22 trillion won, and operating profit approached the consensus of 360 billion won. Analysts note that operating profit also beat expectations when considering the significant one-time costs incurred from a voluntary retirement program implemented in the fourth quarter of last year.

The stock responded immediately to the better-than-expected results. While the KOSPI index showed overall weakness on the day, Amorepacific closed the regular session at 137,300 won, down 1.72% from the previous trading day. However, after the earnings disclosure, shares rebounded in the Nextrade after-market, closing at 140,200 won, up 0.36%. Amorepacific's current share price is approaching its 52-week high of 148,300 won recorded on June 24 last year.

Amorepacific achieved balanced results across overseas markets last year. While operating profit declined 2% domestically, it surged 102% overseas, driving overall earnings growth. Revenue in North and South America increased 20% as skincare products gained popularity. In the EMEA (Europe, Middle East, and Africa) market, sales grew 42% as brand recognition rose for Laneige, Innisfree, and COSRX. The company also turned profitable in the Chinese market, which had been sluggish for some time.

Amorepacific was previously the cosmetics company with the highest market capitalization in Korea but ceded the top position to APR last year. Amorepacific's current market cap stands at 8.0311 trillion won, more than 1 trillion won smaller than APR's 9.601 trillion won. However, analysts say the company has laid the groundwork for a rebound by reducing its dependence on Greater China—where earnings had plummeted due to the THAAD dispute—and performing well in major markets such as the U.S. and Europe.

The K-beauty industry has recently secured world-leading competitiveness across all areas including product planning, manufacturing, and distribution. ODM companies like Kolmar Korea and Cosmax, which handle cosmetics R&D and production, operate branches worldwide with global competitiveness. A robust ecosystem has been established where individual brands handling product planning and marketing produce goods through ODM partners, and specialized distributors like Silicon2 supply these products to overseas distribution channels to target global markets.

"Many experts believe the strength of the K-beauty industry will continue structurally rather than ending as a one-time event," a securities industry official said. "Companies that have diversified their revenue across key regions and brands to reduce risks from trend changes are attracting attention."