AMOREPACIFIC (002790) Q2 2024 earnings summary

Executive summary

• 2Q 2024 revenue decreased 2.4% year-over-year to 1.01 trillion KRW, while operating profit rose 4.2% to 12.2 billion KRW.

• Net profit surged 1717.3% to 537.3 billion KRW, driven by significant non-operating income.

• Major subsidiary Amorepacific saw revenue fall 4.3% to 904.8 billion KRW and operating profit drop 29.5% to 4.2 billion KRW.

Financial highlights

• Group gross margin improved to 71.7% from 70.9% year-over-year.

• SG&A expenses as a percentage of sales remained stable at 70.5%.

• Personnel expenses rose 4.7% due to incentives and COSRX consolidation; depreciation up 6.4%.

• Commission expenses fell 12.5% with lower travel retail sales.

Outlook and guidance

• Domestic business faces continued pressure from declining travel retail and door-to-door channels.

• Overseas growth expected in Western regions and Other Asia, supported by COSRX consolidation.