Cosmax (A192820) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 11.7% year-over-year to KRW 588.6 billion, driven by strong growth in Korea and Southeast Asia, while the US saw a decline.

• Operating profit increased 13.0% year-over-year to KRW 51.3 billion, with a record high Q1 operating margin of 8.7%.

• Net profit dropped 45.8% year-over-year to KRW 10.6 billion, impacted by non-operating losses and a significant one-off expense.

• The company maintains its position as a global leader in cosmetics ODM, with over 90% of sales from ODM products and a diversified international client base.

• Significant investments in R&D and sustainability, including EcoVadis Gold and CDP A- ratings, reinforce competitive advantages.

Financial highlights

• Korea sales up 15.0% year-over-year to KRW 362.8 billion; operating profit up 14.0%.

• China sales up 3.4% to KRW 162.7 billion; operating profit turned negative.

• Indonesia sales up 22.8% to KRW 29.6 billion; Thailand sales up 152.1% to KRW 23.9 billion, both with improved profitability.

• US sales down 26.0% to KRW 28.7 billion; net loss narrowed.

• Gross profit increased 4.5% year-over-year to KRW 104.8 billion; SG&A costs decreased 3.0%.

• Gross margin was 17.8%, slightly up from 17.5% in the prior year.

• Basic EPS for Q1 2025 was KRW 717, compared to KRW 1,696 in Q1 2024.

Outlook and guidance

• US region expects improved performance in the second half as new client sales ramp up.

• Continued investment in production capacity in Korea to meet high demand.

• The company aims to maintain growth by expanding global production capacity and strengthening R&D.

• Focus remains on adapting to regulatory changes and evolving consumer trends in major markets.