Amorepacific Corp., South Korea’s leading cosmetics maker, said on its first-quarter net profit declined 20.9 percent from the previous year, due mainly to a sharp drop in the number of Chinese tourists.
Net income came to 176.7 billion won (US$163 million) in the January-March period, compared with 223.5 billion won tallied for the previous year, the company said in a regulatory filing.
Operating profit fell 25.5 percent to 235.9 billion won, and sales declined 8.8 percent to 1.43 trillion won during the cited period, it said.
The company attributed the weak performance to the decrease in inbound tourists from China, which followed the Beijing government’s ban on sales of Korea-bound package tours amid a diplomatic row over the deployment of a U.S. missile system here.
China has been gradually lifting its travel ban by region, but the effect has yet to be felt by the South Korean retail and tourism industries, according to market sources.
The combined net income of Amorepacific Group, which includes smaller brands like Innisfree and Etude, reached 216 billion won in the first quarter, also down 18.9 percent from a year ago.
Total operating profit was down 26.5 percent to 278.1 billion won, and sales decreased 10.3 percent to 1.66 trillion won during the cited period, it said.
Amorepacific Corp is steadily pursuing the global market with five global champion brands in order to improve its earnings and become a truly global company.
Laneige entered the Australian market by being launched in Sephora last March and Mamonde entered the US market in the US ‘ULTA’, and Innisfree and Etude opened their first stores in Japan and the Middle East respectively. The company is also concentrating its efforts on developing new global markets.
Hera also plans to enter the ASEAN market (Singapore) for the first time in May.