Amorepacific Q1: Skin-care Brands and North American Expansion Drive Sales Growth as Overseas Marketing Push Compresses Margins

Key Highlights
Introduction
Financial snapshot: Q1 results in context
Brand performance: who carried the quarter
Channel strategy: marketplaces, prestige retailers and omnichannel execution
Geographic breakdown: domestic strength, global investment
Product innovation: neo-cushion, A-Cica and bio-based anti-aging ambitions
Marketing and margin trade-offs: why overseas profit fell
Organizational shifts: agility and AI acceleration
Competitive landscape: positioning among global peers
Risks and headwinds
Opportunities and upside
Investor perspective: what to watch next
Retailer and partner implications
Consumer implications: what shoppers will notice
Execution challenges: turning scale into sustainable profit
Strategic scenarios: conservative, balanced, and aggressive
What competitors are likely to do
Measuring long-term success: KPIs beyond quarterly revenue
Case studies and parallels
Practical recommendations for stakeholders
Putting the strategy into practice: near-term milestones to watch
Industry implications: what Amorepacific’s moves mean for K-beauty and global beauty
Closing observations
FAQ

Key Highlights

Q1 revenue reached 1.22 trillion won and operating profit 137.8 billion won, up 6.4% and 7.6% year-on-year; growth powered primarily by skin-care brands Laneige, COSRX and Aestura, plus Amazon-led North American expansion and strong Japan sales.
Domestic operations delivered outsized margin improvement—sales rose 9% and domestic operating profit surged 65%—while overseas sales up 6% produced an 18% decline in operating profit due to elevated marketing investments supporting global brand expansion.
Strategic priorities emphasize expanding core international markets, deepening holistic beauty offerings, advancing bio-based anti-aging technology, improving organizational agility and accelerating AI deployment to sustain mid- to long-term growth.

Introduction

Amorepacific Group reported a first-quarter performance that blends steady top-line expansion with a strategic trade-off: stronger marketing outlays overseas have temporarily weighed on international profitability even as domestic operations recover momentum. The company posted 1.22 trillion won in sales with operating profit rising to 137.8 billion won. That performance reflects a renewed emphasis on skin-care leadership across global markets—Laneige’s new product introductions, COSRX’s rebound in the U.S. and EMEA, and Aestura’s explosive growth in North America anchored the quarter. At the same time, management’s decision to invest behind brand-building abroad—Amazon distribution in North America, entry into Sephora for IOPE, and expansion into 17 European markets for Aestura—signals a deliberate move to entrench Amorepacific among international beauty players.

What unfolded in Q1 reads like a case study of a legacy beauty conglomerate pivoting into a global, digitally enabled skin-care specialist. The domestic recovery shows the portfolio’s resilience in Korea’s competitive market, while international investments reveal a willingness to sacrifice short-term margin for long-term scale. The balance between those forces, and how quickly marketing-driven overseas costs convert into sustainable profit streams, will define Amorepacific’s trajectory through the rest of the year.

Financial snapshot: Q1 results in context

The headline numbers make a tidy story: revenue up 6.4% and operating profit up 7.6% year-on-year. Beneath that, a divergence appears. Domestic operations produced a stronger margin recovery—sales rose 9% and domestic operating profit surged by 65%—but overseas profitability fell by 18% despite a 6% increase in international sales. That dichotomy points to active investment overseas: higher marketing and distribution costs intended to buy market share now, with the expectation of future returns.

A few elements clarify the dynamics:

Revenue mix. Skin-care dominated sales growth, consistent with global market trends that have favored targeted, results-driven skin-care over color cosmetics in recent years. Brands like Laneige and COSRX performed strongly across multiple markets.
Marketing intensity. The drop in overseas operating profit is attributable to elevated marketing spend. International expansion requires heavier upfront costs—localized marketing, partnerships with major retailers, sample programs, influencer campaigns, and marketplace fees.
Channel shifts. Strengthening presence on Amazon in North America and gaining shelf presence in Sephora for IOPE reflect a dual channel approach: marketplaces for scale and prestige retailers for brand positioning.

This pattern—robust topline growth that outpaces immediate margin expansion—is common among consumer companies scaling globally. The critical question is whether customer acquisition costs and marketing investments will translate into durable revenue per consumer and improved lifetime value.

Brand performance: who carried the quarter

Amorepacific’s brand architecture spans prestige and mass, heritage and digital-native labels. During the quarter, several brands distinguished themselves.

Laneige: The brand continued to push new product introductions, such as the Neo Cushion line, and strengthened global presence. Laneige’s success underscores the brand’s ability to combine K-beauty aesthetics with mass-market appeal. Cushion foundations remain a signature product category for Korean beauty, where compact forms and skincare-infused makeup find broad acceptance.
COSRX: Once a breakout indie derma brand, COSRX returned to growth, driven by strong performance in the United States, EMEA and Japan. COSRX’s minimalist, ingredient-forward positioning resonates with consumers seeking clinical, problem-solution products. Its rebound suggests successful reactivation in key channels.
Aestura: Aestura produced triple-digit growth in North America, led by its A-Cica line—products centered on centella asiatica and barrier-repair claims. Aestura also extended into 17 European markets, indicating a concerted effort to globalize what began as a derma-focused Korean brand.
Sulwhasoo: The luxury heritage brand recorded gains across online and offline channels, benefiting from seasonal demand for gift sets and a broader recovery among prestige buyers.
Hera: This brand posted double-digit gains in cushions and lip products, reflecting healthy demand for color cosmetics within premium segments.
Innisfree and IOPE: Innisfree improved competitiveness with a focus on suncare—a category with high repeat purchase rates—while IOPE entered Sephora, a move that can boost brand discovery among global prestige beauty buyers.

These brand-level outcomes reveal a portfolio approach: leverage Laneige and Sulwhasoo for global prestige and premium growth, use COSRX and Aestura for performance-driven derma positioning, and employ Innisfree and other brands to capture mass and sustainability-minded consumers.

Real-world example: COSRX’s resurgence mirrors broader success stories for clean, ingredient-focused skincare brands that scale via U.S. online channels and niche retailers before expanding into department stores and chains. Brands such as Paula’s Choice and The Ordinary followed similar trajectories—starting with strong digital traction and later growing through omnichannel distribution.

Channel strategy: marketplaces, prestige retailers and omnichannel execution

Amorepacific’s channel playbook shows sophistication. The company is executing a two-pronged international expansion: scale via Amazon and market positioning via selective prestige retailers.

Amazon North America: Expanding on Amazon allows rapid access to a vast customer base, low-friction purchasing, and data-driven marketing. Amazon’s platform enables brands to test SKUs, optimize pricing, and scale customer acquisition quickly. However, it also introduces margin pressure due to fees, fulfillment costs and competitive pricing.
Sephora entry for IOPE: Securing a spot in Sephora elevates brand status and offers curated merchandising, sampling programs, and omnichannel discovery. Placement in such a prestige retailer signals readiness for a broader market of beauty enthusiasts and influencers.
Offline channels and seasonal demand: Domestic sales benefitted from strong offline and online performance, with Sulwhasoo seeing upticks linked to gift-giving seasons. Department stores and specialty counters still matter for high-touch premium brands that rely on in-person consultations and sampling.

Balancing Amazon’s efficiency with Sephora’s brand-building power forms a coherent strategy. Amazon captures transactional volume and rapid customer acquisition; Sephora builds prestige and loyalty, supporting higher average order values over time. The key challenge lies in channel conflict and pricing consistency. Brands must manage omni-channel pricing, inventory visibility, and brand messaging to avoid diluting perceived value.

Practical illustration: Many brands—both established and indie—use Amazon for broad reach while positioning premium lines on curated platforms like Sephora or department stores. Successful brands maintain distinct assortments, exclusive SKUs, or prestige packaging to protect margins on higher-end channels.

Geographic breakdown: domestic strength, global investment

Regional performance shows a bifurcated picture:

Korea: Domestic operations were a bright spot. A 9% rise in sales and a 65% jump in operating profit suggest both higher demand across flagship brands and improved operating leverage. Sulwhasoo’s performance across online and offline channels points to resiliency among domestic prestige buyers. Hera’s gains in cushions and lip products indicate continued consumer interest in accessible luxury.
North America: The region showed momentum led by COSRX and Aestura. Amorepacific’s investment in Amazon and targeted marketing drove growth, especially for derma and functional skincare.
Japan and Asia-Pacific: These markets posted strong growth, led by Laneige and other derma-focused brands. Indonesia, Vietnam and India were identified as key growth markets—places where rising middle-class populations and heightened interest in premium skincare present long-term opportunity.
Europe: Aestura’s expansion into 17 European markets indicates initial traction. However, European expansion often requires careful regulatory navigation (ingredient compliance, claims substantiation) and localized marketing.

These regional patterns suggest Amorepacific is prioritizing markets where Korean beauty’s heritage and product differentiation—clinical formulas, novel delivery formats, ingredient storytelling—resonate most. High-growth potential in Southeast Asia and India aligns with demographic shifts and rising consumer spending on beauty and personal care.

Contextual perspective: Many global beauty conglomerates pursue a similar route—defend a strong home market while allocating resources to build brands in priority international markets. The transition typically requires higher short-term marketing and infrastructure investment, which Amorepacific appears to be undertaking deliberately.

Product innovation: neo-cushion, A-Cica and bio-based anti-aging ambitions

New product launches and R&D direction are central to Amorepacific’s strategy. Laneige’s Neo Cushion launch demonstrates how product innovation continues to anchor growth. Cushion foundations, a K-beauty staple, perform well when brands iterate on formulation, coverage and multifunctionality—infusing skincare benefits into makeup products.

Aestura’s A-Cica line underlines the potency of derma-led claims. Centella asiatica, popularly branded as “cica,” has gained mainstream appeal for its soothing and barrier-repair benefits. Aestura’s success in North America confirms consumer interest in clinical efficacy combined with simple, trust-building ingredient stories.

Beyond product launches, Amorepacific is investing in bio-based anti-aging technologies. This pursuit carries scientific and marketing implications:

Scientific edge. Bio-based anti-aging suggests research around cellular-level mechanisms, biotechnology-derived actives, and innovations that target aging pathways more precisely. Outcomes may include higher efficacy claims and potential premium pricing.
Sustainability narrative. Bio-based often aligns with sustainability goals—using renewable biological feedstocks rather than petrochemical derivatives—and appeals to environmentally conscious consumers.
Regulatory and validation demands. Anti-aging claims attract scrutiny. Brands must back claims with clinical data and navigate complex regulatory frameworks, especially in markets with strict advertising controls.

Real-world parallels: Global peers have invested heavily in biotechnology and skin science. For instance, companies have pursued peptide research, microbiome modulation and cell-signalling actives to differentiate their anti-aging portfolios. These investments can yield meaningful product differentiation but require patient capital and rigorous validation.

Marketing and margin trade-offs: why overseas profit fell

While overall sales rose, overseas operating profit fell 18%—a direct consequence of higher marketing spending. Understanding this trade-off requires unpacking the marketing levers involved and their expected payback horizons.

Acquisition vs. retention. Initial global launches necessitate customer acquisition at higher cost: influencer seeding, sampling, platform fees and introductory discounts. Retention campaigns and loyalty programs typically follow and are more profitable over time.
Localized creative and regulatory compliance. Entering new markets calls for localized creative assets, language adaptations, and regulatory adjustments—each a non-trivial marketing cost.
Retailer co-op and slotting fees. Securing shelf space in prestige retailers or prominent visibility on digital marketplaces can require co-operative marketing funds, promotional allowances and, sometimes, slotting fees.
Influencer and content investments. Paid partnerships and content production to build brand awareness globally can be expensive but are instrumental for discovery.

The accounting impact is immediate—marketing costs show up in current-period operating expenses—while the benefits accrue over multiple quarters or years as brand awareness converts to repeat purchases. Investors will watch whether unit economics improve as CAC declines and repeat purchase rates rise.

Example from practice: Many brands, including major Western beauty houses, initially accept margin compression to build distribution. After building scale and customer loyalty, they renegotiate terms, optimize marketing spend, and realize margin recovery. The timing and precision of these efforts determine whether the initial investment was prudent.

Organizational shifts: agility and AI acceleration

Amorepacific signaled plans to drive organizational agility and accelerate AI adoption. These moves aim to sharpen execution across a complex, internationally expanding portfolio.

Organizational agility. Faster decision cycles, cross-functional squads, and decentralized local teams can help the company respond quicker to market signals. Agility reduces time-to-market for product iterations and improves local relevance.
AI and data-driven marketing. AI can enhance personalization, optimize pricing, predict demand, and improve supply chain planning. On the marketing side, AI-powered creative optimization and programmatic media buying can reduce CAC while improving conversion.
Product development. AI-assisted formulation and predictive modeling can speed R&D and identify promising ingredient combinations, shortening the innovation cycle.
Customer experience. AI-driven recommendations on D2C platforms and chat-based customer support can boost conversion rates and reduce service costs.

Practical consequences: Companies that deploy AI effectively can lower operating costs, improve customer lifetime value, and achieve sharper product-market fit. Yet AI adoption requires strong data governance, talent, and integration across legacy systems.

Real-world analogy: Beauty brands have used AI to deliver personalized skincare routines and ingredient-based recommendations. Platforms that combine consumer data, image analysis and ingredient databases can offer tailored product suggestions that increase basket size and repeat purchases.

Competitive landscape: positioning among global peers

Amorepacific sits among global beauty conglomerates and a proliferation of indie brands. Its strengths include strong Korean heritage, broad brand portfolio, and growing footholds in strategic international channels.

Strength vs. global conglomerates. Against large players, Amorepacific leverages nimble innovation cycles and deep expertise in skin-care formulation, especially for cushion technology and derma-focused actives. Global giants possess scale and broader distribution, but they often lack the rapid product iteration favored by K-beauty.
Competition with indie brands. Indie brands capture niche consumer segments through authenticity and direct engagement. Amorepacific counters this by scaling niche propositions—like COSRX and Aestura—across broader geographies with the backing of distribution and marketing resources.
Channel competition. On Amazon, competition is fierce and price-sensitive. On prestige shelves, differentiation hinges on packaging, efficacy claims and sampling strategies.

Strategic implication: Amorepacific’s multi-brand, multi-channel approach intends to capture consumers at different price points and preferences. Success depends on maintaining distinct brand identities while leveraging centralized capabilities (R&D, supply chain, digital infrastructure).

Industry example: Many Korean beauty players have successfully internationalized by emphasizing specific strengths—ingredient transparency, texture innovation and multifunctionality—while ensuring distribution via both digitally native channels and traditional retailers.

Risks and headwinds

Several risks could interfere with realization of mid- to long-term goals:

Marketing ROI uncertainty. If international marketing does not produce lasting customer acquisition or repeat purchase, elevated expenses could erode margins further.
Channel conflict. Managing Amazon’s pricing dynamics while preserving premium placement in retailers like Sephora requires careful SKU and price management to avoid cannibalization.
Regulatory complexity. Expanding into Europe, North America and other Asian markets involves navigating diverse regulatory environments for cosmetic claims and ingredients.
Supply chain pressures. Global expansion stresses logistics, inventory forecasting and production scalability. Any mismatch can lead to stockouts or excess inventory and reduce profitability.
Competitive intensity. Fast-followers and local competitors in Asia and other markets can pressure pricing and customer retention.
Macroeconomic sensitivity. Consumer discretionary spending on premium beauty products can be cyclical and sensitive to economic conditions.

Mitigating these risks will require disciplined marketing spend, robust local market teams, clear channel strategies and continual measurement of unit economics.

Opportunities and upside

The same initiatives that produce risk also create opportunities:

High-growth Asia markets. Indonesia, Vietnam, and India present room for meaningful growth as middle-class populations expand and skincare adoption increases.
Performance skincare demand. Consumers continue to prioritize clinically effective, ingredient-led products. Brands like COSRX and Aestura are positioned to capture this trend.
Cross-selling and lifetime value. As consumers adopt one brand within the Amorepacific stable, the company can cross-sell adjacent SKUs, increasing overall lifetime value per customer.
Technology-enabled personalization. AI-driven personalization can increase conversion and repeat purchases, improving marketing efficiency.
Sustainability and bio-based claims. If executed credibly, bio-based and science-backed anti-aging innovations can command premium pricing and differentiate offerings.

These opportunities hinge on execution—converting marketing investments into repeat customers and optimizing margin structure across channels.

Investor perspective: what to watch next

For investors assessing Amorepacific, several indicators will signal whether the strategy is working:

Marketing ROI metrics. Look for improvements in customer acquisition cost, repeat purchase rate, and cohort lifetime value across international markets.
Margin recovery timeline. Tracking overseas operating profit trends over subsequent quarters will reveal whether marketing investments translate into profitable scale.
Channel momentum. Amazon sales growth rates, Sephora rollout performance for IOPE, and distribution gains in Japan, Europe and Southeast Asia will matter.
R&D milestones. Progress on bio-based anti-aging research and any new product launches that can be clinically substantiated would strengthen premium positioning.
AI and data initiatives. Early wins in personalization, inventory optimization, or targeted marketing that reduce overall spend without sacrificing growth will validate management’s direction.

Quarterly updates that show declining marketing as a percentage of sales and rising repeat purchases would indicate a favorable shift from investment mode to harvesting mode.

Retailer and partner implications

Retailers and distribution partners should assess how Amorepacific’s strategy affects assortment and collaboration:

Retailers benefit from brands that drive foot traffic and incremental basket size. Limited-edition launches, exclusive formulations and co-branded activations can stimulate engagement.
Online platforms gain from sustained interest in performance skincare. Amorepacific’s presence on Amazon provides volume, but retailers must manage inventory and promotions to protect margins.
Partnerships with prestige retailers like Sephora require curated assortments and experiential marketing—brands should bring compelling in-store demos and sampling programs to succeed.

For independent retailers, attention to SKU rationalization and training around derma-focused product benefits will influence sell-through rates.

Consumer implications: what shoppers will notice

Consumers can expect several practical shifts as Amorepacific executes its strategy:

More product innovation. New cushion formulations, targeted derma solutions and anti-aging launches will expand choice.
Wider availability. Global expansion means greater access to brands that were previously hard to find outside Korea.
Promotional cycles. Early-stage expansion often comes with introductory offers on marketplaces—consumers may see aggressive promotions initially.
Brand differentiation. Expect clearer positioning between brands—heritage luxury, clinical derma, mass-market suncare—so consumers can find products aligned with their needs.

For consumers seeking clinically backed skincare, the growth of brands like COSRX and Aestura will increase options. For prestige buyers, Sulwhasoo and Laneige will continue to supply high-touch offerings with luxury packaging and seasonal releases.

Execution challenges: turning scale into sustainable profit

The critical operational task ahead is converting the current investment phase into sustainable profitability. This requires multiple coordinated actions:

Channel segmentation. Maintain distinct positioning and SKU strategies across Amazon, Sephora and department stores to preserve margins.
Data-driven marketing. Use AI to target high-LTV customers and reduce wasted ad spend that does not convert into repeat purchases.
Local partnerships. Strengthen relationships with local distributors, marketing agencies and retail teams to fine-tune messaging and product-market fit.
Supply chain responsiveness. Improve forecasting and inventory allocation to avoid stockouts in high-demand markets and reduce markdowns.
Clinical evidence. Invest in robust clinical validation for anti-aging and derma claims to build long-term trust, particularly in regulated markets.

Companies that fail to manage these execution levers often find themselves incurring elevated marketing costs without the expected payoff.

Strategic scenarios: conservative, balanced, and aggressive

Different market environments and management choices will produce varying outcomes. Consider three scenarios:

Conservative: Slow international roll-out with tight marketing controls, prioritizing domestic margin recovery. Growth stabilizes but slower global share gains.
Balanced: Targeted investments in high-potential markets (North America, Japan, Southeast Asia) with measured marketing spend and prioritized channel strategies. Achieves steady international growth with progressive margin improvement.
Aggressive: Heavy marketing and expansion across multiple geographies to capture rapid market share. Risks deeper margin compression short-term but could yield faster global scale if customer retention follows.

Management’s stated priorities—expanding core international markets, strengthening holistic beauty solutions and accelerating AI—suggest a balanced approach leaning toward targeted, data-driven expansion rather than indiscriminate global spending. Execution fidelity will determine whether the balanced approach pays off.

What competitors are likely to do

Competitors will observe Amorepacific’s moves and react in several ways:

Increased promotion in key channels. Expect price and promotional responses on Amazon and in prestige retail, especially if Amorepacific’s launches prove disruptive.
Product innovation acceleration. Rival brands may accelerate derma and bio-based product development to defend share.
Strategic partnerships. Local players could form partnerships with e-commerce platforms or retailers to secure placement and visibility.
Marketing escalation. Competitors might increase influencer and content spend to counter brand awareness campaigns.

Competition will sharpen in market segments showing rapid growth, particularly performance skincare. Brands that remain nimble in creative execution and efficient in customer acquisition will hold advantages.

Measuring long-term success: KPIs beyond quarterly revenue

Beyond quarterly sales and operating profit, several KPIs will indicate sustainable success:

Repeat purchase rate and subscription uptake for core skin-care SKUs.
Customer lifetime value by market and channel.
Gross margin trends excluding one-time launch costs.
CAC payback period—the time to recoup acquisition costs from repeat purchases.
Market share gains in priority geographies and channels.
SKU-level profitability and sell-through rates.

Tracking these metrics will reveal whether marketing investments and channel strategies are converting into durable brand equity and financial returns.

Case studies and parallels

Several industry examples illustrate paths Amorepacific might follow:

Digital native brands that scaled via Amazon and direct-to-consumer channels before entering prestige retailers often saw two phases: initial rapid customer acquisition with compressed margins, followed by improved profitability as repeat purchases and higher-margin assortments developed.
Established beauty houses that invested in biotechnology or advanced actives faced longer R&D cycles but reaped premium pricing and stronger trust when claims were substantiated.
Market entrants in Southeast Asia often benefited from localized product formulations and targeted influencer strategies that spoke directly to regional consumer preferences.

Amorepacific’s portfolio approach—nurturing derma brands like COSRX and Aestura while supporting prestige names such as Sulwhasoo and Laneige—mirrors effective diversification seen in other successful beauty conglomerates.

Practical recommendations for stakeholders

For investors: Monitor marketing efficiency metrics and overseas operating profit trends. Look for evidence of improving CAC payback and rising repeat purchases.
For retail partners: Leverage Amorepacific’s new launches with curated merchandising and sampling to drive higher engagement and upsell.
For consumers: Explore new derma-focused launches and watch for localized promotional windows when brands enter new markets.
For employees and talent markets: Expect the company to prioritize data, AI skills and localized marketing capabilities as it scales internationally.

These stakeholders all benefit when Amorepacific converts investment into sustainable customer relationships and margin recovery.

Putting the strategy into practice: near-term milestones to watch

Several near-term milestones will indicate whether the strategy is scaling effectively:

Performance of Laneige’s Neo Cushion beyond initial launch—measures include sell-through, repeat purchases and channel mix.
Conversion rates and retention for customers acquired via Amazon in North America.
IOPE’s performance within Sephora—impact on brand visibility and average order value.
Aestura’s expansion in European markets—local partner performance and regulatory compliance metrics.
Progress reports on bio-based anti-aging research and any clinical data that supports premium claims.
Implementation milestones for AI initiatives—pilot outcomes for personalization and supply chain optimization.

Successful navigation of these milestones will strengthen market confidence in Amorepacific’s mid- to long-term plan.

Industry implications: what Amorepacific’s moves mean for K-beauty and global beauty

Amorepacific’s results and strategy underline larger industry currents:

K-beauty’s evolution. The K-beauty movement has matured; winners now marry fast innovation with clinical validation and global distribution muscle.
Derma-beauty traction. Consumers continue to favor clinically minded, ingredient-led products that promise tangible outcomes.
Platform-driven expansion. Marketplaces and prestige retailers remain complementary levers for scaling a beauty brand globally.
Tech and science integration. AI and biotechnology are becoming core competitive domains as brands seek to personalize experiences and substantiate efficacy.

Amorepacific’s approach will likely encourage other Korean firms to accelerate internationalization while investing in science and data capabilities.

Closing observations

Amorepacific’s first quarter paints a picture of transition: strong underlying demand for skin-care brands and an intentional, investment-led push to globalize the portfolio. The marked improvement in domestic profitability demonstrates operational strength at home, and the company’s willingness to accept international margin pressure reflects long-term market-building priorities. Execution risk is measurable but manageable if marketing converts to repeat buyers and AI and R&D investments shorten the path from launch to loyal customer base.

Success will depend on maintaining clear brand differentiation across channels, optimizing marketing spend through data-driven tactics, and demonstrating the efficacy of new bio-based technologies. Each of these elements must come together to convert the current expansion into sustained, profitable growth.

FAQ

Q: What were Amorepacific’s headline Q1 financials?
A: Amorepacific reported 1.22 trillion won in first-quarter sales and an operating profit of 137.8 billion won, representing year-on-year increases of 6.4% and 7.6%, respectively.

Q: Which brands drove the quarter’s growth?
A: Growth was led by skin-care brands Laneige, COSRX and Aestura. Laneige strengthened with new product launches like the Neo Cushion, COSRX returned to growth in the U.S., EMEA and Japan, and Aestura achieved triple-digit growth in North America with its A-Cica line.

Q: Why did overseas operating profit decline despite higher sales?
A: Overseas operating profit fell 18% due to increased marketing spending aimed at accelerating brand expansion in priority international markets. These investments raised expenses in the short term while intended to build long-term brand equity and customer bases.

Q: How did domestic performance compare to international results?
A: Domestic sales rose 9% and domestic operating profit surged by 65% year-on-year, driven by strong demand across major brands and channels. The domestic market delivered stronger margins, contrasting with the margin compression seen overseas due to elevated marketing investments.

Q: What channels are driving Amorepacific’s international expansion?
A: The company is leveraging Amazon in North America for scale and entered prestige retail—with IOPE being introduced into Sephora—to build brand positioning. It is pursuing omnichannel strategies across markets to balance reach and prestige.

Q: What is the company’s mid- to long-term strategy?
A: Strategic priorities include expanding core international markets, strengthening holistic beauty solutions, advancing bio-based anti-aging technologies, improving organizational agility, and accelerating AI adoption.

Q: What are the biggest near-term risks to this strategy?
A: Key risks include uncertain marketing ROI in new markets, channel conflict between marketplaces and prestige retailers, regulatory complexities across regions, supply chain constraints, and heightened competitive pressure.

Q: What milestones should investors watch?
A: Investors should monitor improvements in marketing efficiency (CAC and payback period), repeat purchase rates, overseas operating profit trends, performance of new product launches (e.g., Neo Cushion), Sephora traction for IOPE, and R&D progress on bio-based anti-aging claims.

Q: How will AI be used within the company?
A: Management plans to use AI for personalization in marketing and customer experiences, demand forecasting and inventory optimization, product development and formulation assistance, and operational efficiency improvements across teams.

Q: What does this mean for consumers?
A: Consumers should expect broader availability of Amorepacific brands in more markets, new product innovations with clinical and ingredient-focused positioning, and occasional promotional activity as brands enter new markets and channels.