Amorepacific, LG H&H see differing results in Q2

(Yonhap News)

Amorepacific Corp. and LG H&H Co., South Korea’s leading cosmetics firms, reported diverging performances for the second quarter of 2025.

The key factor behind the difference in performance was how effectively each company restructured its overseas operations, particularly in China.

According to multiple industry sources on Monday, Amorepacific’s operating profit for the second quarter of the year was 73.7 billion won ($53.2 million), up a staggering 1,673 percent from the same period last year. Revenue was 1 trillion won, up 8.9 percent during the same period.

The company attributed this to strong performance in domestic cosmetics and daily beauty sectors, continued growth in Western markets, and a successful restructuring of its China operations.

Domestic operating profit rose 164 percent to 40.2 billion won while overseas operating profit surged 611 percent to 36 billion won in the second quarter from a year ago. In Greater China, where the company improved its business structure, sales increased 11.1 percent and operating profit jumped more than 17-fold year-on-year.

“We are continuing our global rebalancing strategy,” an Amorepacific official said. “We are strengthening distribution partnerships in key growth regions and experimenting with various business models overseas.”

For its part, LG H&H reported 1.6 trillion won in revenue in the second quarter of 2025, down 8.8 percent from a year ago, while its operating profit also fell 65.4 percent to 54.8 billion won. Particularly concerning was the 19.4 percent drop in cosmetics sales and an operating loss of 16.3 billion won, the first quarterly loss in this segment since 2004.

The diverging performance between the two companies essentially came down to how much they reduced their dependence on China. Analysts noted that LG H&H’s heavy reliance on duty-free and Chinese markets, along with its premium brand-focused structure, led to the slump.

While revenue in China fell 8 percent, sales in North America and Japan jumped 6.4 percent and 12.9 percent respectively, indicating some overseas growth.

LG H&H plans to aggressively pursue the North American market.

“We have entered North America by launching the luxury brand The History of Whoo’s Hwanyu in New York and have introduced new growth engines, including the LG Pra.L Superform Galvanic Booster and its exclusive cosmetics line,” an LG H&H official said.

Meanwhile, the global cosmetics industry landscape has been shifting rapidly. According to Korea Customs Service’s export data, the proportion of cosmetics exports to Greater China dropped from 39.8 percent to 22 percent between January 2024 and July 2025. Exports to Asia also declined from 67.6 percent to 48.8 percent during the same period.

In contrast, North America grew from 15.9 percent to 22.2 percent, Europe from 12.2 percent to 20.7 percent, and the Middle East from 2.4 percent to 4.1 percent.

Chinese local brands have also emerged as strong competitors, presenting a growth threat to Korean cosmetics.