K-food and K-beauty companies staged an earnings rebound in the first quarter by leaning on overseas markets, even as domestic consumption slowed and cost pressures persisted. With global demand expanding across the United States, Europe and Southeast Asia, the share of overseas business is growing rapidly, and some companies posted record quarterly results.
K-beauty companies led the way. Kolmar Korea, a cosmetics original development manufacturing (ODM) company, posted record quarterly results with first-quarter consolidated revenue of 728 billion won, up 11.5 percent year-on-year, and operating profit of 78.9 billion won, up 31.6 percent. Operating profit significantly exceeded market expectations. The gains were driven by increased export volumes from indie brands centered on the U.S. and Japan, along with rising orders for sun care and skin care products ahead of the summer season.
APR showed even sharper growth. First-quarter revenue reached 593.4 billion won and operating profit 152.3 billion won, surging 123 percent and 173 percent year-on-year, respectively. With overseas sales accounting for as much as 89 percent of total revenue, the company is now considered to have a business structure on par with a global firm. After its Medicube brand topped Amazon's beauty category in North America, the effects of expanded distribution networks in major European markets including the United Kingdom, France, Germany and Italy are now being fully reflected. Industry observers note that the growth axis of K-beauty is spreading from the U.S. to Europe.
The food industry also saw overseas business support earnings. Lotte Wellfood posted first-quarter operating profit of 35.8 billion won, up 118.4 percent year-on-year. Its subsidiaries in India and Kazakhstan continued their growth momentum, and expanded exports to the U.S. and China added to the gains. The overseas share of total revenue rose to 32 percent. The company is responding with premium products and trend-driven new launches in the domestic market, while strengthening local subsidiary efficiency and brand expansion strategies overseas.
KT&G also beat market expectations on the back of strong overseas tobacco sales. First-quarter consolidated operating profit rose 27.7 percent year-on-year to 364.5 billion won. Overseas cigarette sales reached a record quarterly high of 559.6 billion won, with operating profit surging 56.1 percent. Sales volumes grew evenly across the Asia-Pacific and Eurasia regions, compounded by strategic price increases and cost efficiencies. The company plans to further expand direct overseas entry into its next-generation product (NGP) business.
Dongwon Industries also improved earnings, supported by growth in business-to-business segments including packaging, logistics and food ingredient distribution. First-quarter consolidated operating profit rose 17.1 percent year-on-year to 146.2 billion won. While the seafood and food segments saw margin pressure from exchange rates and raw material costs, non-food affiliates including Dongwon Home Food, Dongwon Systems and Dongwon LOEX defended earnings with steady growth.
Orion is also generating rising expectations for overseas expansion. Kyobo Securities forecast that Orion's first-quarter operating profit would exceed market expectations and raised its target price. In China, the Lunar New Year effect and expanded sales through snack shops and e-commerce channels continued, while Russia has maintained high growth amid supply shortages. In Vietnam, distribution networks are expanding, centered on large supermarkets.
Analysts say the simultaneous overseas success of major consumer goods companies reflects the spread of K-content and strengthened local distribution networks. With preference for Korean brands rising on the back of K-pop and dramas, companies are simultaneously expanding locally tailored products, online platforms and offline distribution channels. APR is expanding its presence in Walmart, Target and Costco in the U.S., while Lotte Wellfood is strengthening the efficiency of its local sales network through the consolidation of its Indian subsidiary.
The domestic market, by contrast, remains a burden. With slowing consumption, high inflation, a rising exchange rate and raw material price volatility continuing, companies are responding with profitability-focused strategies. Representative examples include trimming low-margin product lines, improving logistics efficiency and strengthening premium offerings. "As it has become difficult to grow on domestic sales alone, overseas expansion is no longer a choice but a necessity," an official in the food industry said. "Recognition of K-brands is rising rapidly, particularly in the U.S. and European markets, and global business competitiveness is becoming a core indicator of corporate value."
