Amorepacific (090430) Q3 2024 earnings summary

Executive summary

• Revenue increased 9.9% year-over-year to 977.2 billion KRW for the quarter and 1.7% to 2,793.4 billion KRW for the first nine months of 2024, driven by strong overseas growth despite a domestic decline.

• Operating profit surged 277.7% to 65.2 billion KRW for the quarter and 62.3% to 142.0 billion KRW for the first nine months, with both domestic and overseas businesses improving profitability.

• Net income rose 39.5% year-over-year to 37.2 billion KRW for the quarter and 62.3% to 142.0 billion KRW for the first nine months.

• Domestic sales declined 2.4% year-over-year, while overseas sales grew 11.1%, led by North America and EMEA, despite a 13% drop in Asia.

• The acquisition of COSRX was completed, increasing the stake to 90.2% and strengthening the global portfolio.

Financial highlights

• Gross profit grew 11.3% year-over-year to 683.4 billion KRW, with gross margin improving to 69.9% for the quarter and 29.6% for the nine months.

• SG&A expenses increased 3.6%, mainly due to higher marketing and depreciation costs.

• Marketing expense rose 17% and depreciation cost increased 16.8% year-over-year.

• Basic EPS: KRW 9,392 (up from KRW 2,609 YoY).

Outlook and guidance

• Enhanced profitability expected from continued overseas expansion and premium product focus.

• Focus on strengthening brand competitiveness and expanding global business, especially in North America.

• Continued investment in R&D and sustainability initiatives, with a target to increase the share of eco-friendly products.

• Guidance for dividend payout ratio at 35% of net income through 2025.

• Ongoing restructuring in Greater China may impact short-term performance but aims to strengthen long-term growth.