Amorepacific, LG Household report robust Q1 earnings
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According to industry sources on Monday, the two cosmetics giants have seen an upward trend in performance since the beginning of 2024, overcoming setbacks from the Chinese market.
Amorepacific Group recorded sales of 1.06 trillion won ($7.86 billion) and an operating profit of 83 billion won in the first quarter of the year. Although sales fell by 0.2 percent compared to the same period last year, operating profit grew by 1.7 percent. For its part, LG Household & Health Care saw increases in both sales and operating profit in the first quarter of the year from a year ago. Operating profit returned to a growth trajectory for the first time in 10 quarters since the third quarter of 2021.
Both companies exceeded expectations, with industry insiders also crediting the duo’s strategic M&A activities for the successful turnaround, with bold investments made during challenging times beginning to yield results.
Amorepacific recently conducted two M&A deals as part of its efforts to expand into the U.S. market, first acquiring Tata’s Natural Alchemy in 2022. Tata’s Natural Alchemy operates the U.S. beauty brand Tata Harper, which Amorepacific acquired for 168.1 billion won to gain 100 percent ownership. Tata Harper is a premium skincare brand in the U.S. that emphasizes “clean beauty” by using only natural ingredients and excluding genetically modified organisms (GMOs), additives, artificial colors and fragrances, and synthetic chemicals. The brand has successfully built a solid fan base in the U.S. market, capitalizing on the recent vegan beauty trend.
Amorepacific also acquired the skincare brand Cosrx in 2023, which has expanded into more than 140 countries worldwide, including North America and Europe, as well as investing about 935.1 billion won during this process. Cosrx has become a major success for Amorepacific despite concerns about excessive investment, with the Corsx snail cream, “Snail Mucin,” remaining highly popular and maintaining its position as a best-selling product on Amazon.
LG Household & Health Care took a different approach by focusing on the Japanese market. But it also used M&A as part of its strategy by acquiring a 75 percent stake in Viva Wave, the holder of the cosmetics brand Hince, a Korean beauty brand that has been making waves in the Japanese color cosmetics market, for about 42.5 billion won in September 2023. Hince’s sales in Japan are also seeing an uptick as the K-beauty craze intensifies among young Japanese women.
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