South Korea's top two cosmetics firms report differing results for Q2
SEOUL, Aug. 5 (UPI) -- South Korea's two leading cosmetics companies reported differing results for the second quarter of this year. Runner-up player Amorepacific fared well, while business bellwether LG Household & Health Care struggled.
Amorepacific said Friday that its second-quarter operating profit was $53 million, up more than 16-fold from a year ago. During the three-month period, its sales also jumped 11.1% year-over-year to reach $720 million.
The Seoul-based company was supported by stellar performance in global markets. It posted double-digit sales growth in such major markets as the United States, China and the Middle East.
An analyst said Amorepacific boosted its bottom line thanks to improvement in China, where the company suffered huge losses in the past.
"It seems that Amorepacific's Chinese business recorded a small amount of operating profit in the second quarter, following the first quarter," Korea Investment & Securities analyst Kim Myung-joo said in a market report.
"It has restructured its transaction model in China, which caused inefficiencies last year, and has also significantly reduced the number of offline stores. Thanks to these structural changes, it is not likely to log large losses in China anymore," Kim said.
By contrast, LG Household's revenue stood at $1.15 billion during the April-June period, down 8.8% from a year before. Its operating income dropped 65.4% year-over-year to $39 million.
The company's beauty business suffered an operating loss of $1.2 million, the first quarterly deficit in two decades.
The disappointing results of LG Household, a unit of LG Group, is attributable to the stiff competition in its traditional channels, including duty-free shops and door-to-door sales.
Despite the solid results, Amorepacific's share price dipped more than 5% over the past three trading days through Tuesday. LG Household also faced a similar downturn during this span.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NBC News
a few seconds ago
- NBC News
Claire's, known for piercing millions of teens' ears, files for Chapter 11, 2nd time since 2018
NEW YORK (AP) — Mall-based teen accessories retailer Claire's, known for helping to usher in millions of teens into an important rite of passage — ear piercing — but now struggling with a big debt load and changing consumer tastes, has filed for Chapter 11 bankruptcy protection. Claire's Holdings LLC and certain of its U.S. and Gibraltar-based subsidiaries — collectively Claire's U.S., the operator of Claire's and Icing stores across the United States, made the filing in the U.S. Bankruptcy Court in Delaware on Wednesday. That marked the second time since 2018 and for a similar reason: high debt load and the shift among teens heading online away from physical stores. Claire's Chapter 11 filing follows the bankruptcies of other teen retailers including Forever 21, which filed in March for bankruptcy protection for a second time and eventually closed down its U.S. business as traffic in U.S. shopping malls fades and competition from online retailers like Amazon, Temu and Shein intensifies. Claire's, based in Hoffman Estates, Illinois and founded in 1974, said that its stores in North America will remain open and will continue to serve customers, while it explores all strategic alternatives. Claire's operates more than 2,750 Claire's stores in 17 countries throughout North America and Europe and 190 Icing stores in North America. In a court filing, Claire's said its assets and liabilities range between $1 billion and $10 billion. 'This decision is difficult, but a necessary one,' Chris Cramer, CEO of Claire's, said in a press release issued Wednesday. 'Increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, in combination with our current debt obligations and macroeconomic factors, necessitate this course of action for Claire's and its stakeholders.' Like many retailers, Claire's was also struggling with higher costs tied to President Donald Trump's tariff plans, analysts said. Cramer said that the company remains in 'active discussions' with potential strategic and financial partners. He noted that the company remains committed to serving its customers and partnering with its suppliers and landlords in other regions. Claire's also intends to continue paying employees' wages and benefits, and it will seek approval to use cash collateral to support its operations. Neil Saunders, managing director of GlobalData, a research firm, noted in a note published Wednesday Claire's bankruptcy filing comes as 'no real surprise.' 'The chain has been swamped by a cocktail of problems, both internal and external, that made it impossible to stay afloat,' he wrote. Saunders noted that internally, Claire's struggled with high debt levels that made its operations unstable and said the cash crunch left it with little choice but to reorganize through bankruptcy. He also noted that tariffs have pushed costs higher, and he believed that Claire's is not in a position to manage this latest challenge effectively. Competition has also become sharper and more intense over recent years, with retailers like jewelry chain Lovisa offering younger shoppers a more sophisticated assortment at low prices. He also cited the growing competition with online players like Amazon. 'Reinventing will be a tall order in the present environment,' he added.
New York Times
a few seconds ago
- New York Times
Trump Threatens 100% Tariff on Chips, With a Big Caveat
President Trump threatened on Wednesday to impose a 100 percent tariff on foreign semiconductors, in an effort to bring supply chains for electronics back to the United States. The tariff, which could be unveiled next week, would apply to all countries and companies, unless businesses make a commitment to invest and build in the United States. Mr. Trump pointed to Apple, which announced a $100 billion investment in U.S. manufacturers on Wednesday, as an example of a company that would be spared the levies. 'If you're building, there will be no charge,' Mr. Trump said. He added that companies that don't fulfill investment promises would be held accountable with fines. 'That's a big statement, and I think the chip companies are all coming back home.' Should Mr. Trump follow through on his promise, it would be a huge relief for tech companies that have been anxiously anticipating an announcement on semiconductor tariffs. Nvidia, Taiwan Semiconductor Manufacturing Company, Micron and other companies could benefit by avoiding huge fees on their businesses because in recent months they have pledged to invest in the United States. The restrictions on the tariffs would also provide some relief to consumers and businesses, who would be less likely to pay higher prices on foreign electronics and tools. Semiconductors are essential in any device with an on-off switch, but they are heavily produced in Asia. Following a shortage of chips during the pandemic, U.S. officials have tried to reduce the country's dependence on foreign semiconductors, and particularly factories in Taiwan, a self-governing island that faces the threat of a Chinese invasion. In 2024, the Biden administration signed contracts to award tens of billions of dollars in subsidies to semiconductor companies to build new factories in the United States, including in New York, Arizona and Texas. But Mr. Trump has criticized those investments as wasteful, saying that all the industry needed to encourage them to move to the United States were large tariffs. To encourage the production of semiconductors in the United States, he has favored replacing the subsidies with tariffs. Earlier this year, Mr. Trump started an inquiry into semiconductor production under a national security law known as Section 232, which he has used to apply tariffs to imported steel, aluminum, copper products and cars. The law allows the president to impose tariffs on foreign products in the interest of national security. The administration is wrapping up that inquiry and expected to announce its tariff proposal this month.
Washington Post
a few seconds ago
- Washington Post
Fortuna: Q2 Earnings Snapshot
VANCOUVER, British Columbia — VANCOUVER, British Columbia — Fortuna Mining Corp. (FSM) on Wednesday reported earnings of $37.3 million in its second quarter. On a per-share basis, the Vancouver, British Columbia-based company said it had profit of 12 cents. Earnings, adjusted to account for discontinued operations, came to 14 cents per share.
