1. What Happened?
Amorepacific reported consolidated revenue of KRW 2.07 trillion and operating profit of KRW 191.4 billion for Q2 2025, representing year-over-year growth of 14.1% and 149.1%, respectively. The company’s luxury brands performed well, and its overseas market diversification strategy paid off. However, net profit came in at KRW 37.6 billion, a 55% decline compared to preliminary estimates.
2. Why Did This Happen?
The robust revenue and operating profit growth were driven by strong performance of luxury and premium brands, the acquisition of Cosrx, and successful expansion in overseas markets, particularly North America and EMEA. The decline in net profit is attributed to increased amortization costs related to the Cosrx acquisition, one-off expenses, and foreign exchange losses.
3. What’s Next?
While Amorepacific has positive growth momentum, the decline in net profit creates uncertainty. Future performance will depend on the sustained impact of the Cosrx acquisition, continued growth in overseas markets, and effective management of foreign exchange and interest rate volatility.
4. What Should Investors Do?
A ‘wait-and-see’ approach is recommended for Amorepacific investments. The positive growth trend and the decline in net profit present conflicting signals. Investors should carefully analyze the detailed financial statements to understand the reasons for the profit decline and assess the sustainability of overseas market growth before making investment decisions.
Q: What are the key takeaways from Amorepacific’s Q2 2025 earnings?
A: Revenue and operating profit showed significant growth, but net profit fell short of expectations. While luxury brands and overseas market expansion drove revenue, costs related to the Cosrx acquisition are likely the main reason for the decline in net profit.
Q: Is it a good time to invest in Amorepacific?
A: A cautious approach is recommended. While the growth momentum is positive, the decline in net profit raises concerns. Investors should analyze future financial statements and market conditions before making investment decisions.