[Edaily Reporter KYUNG GYEYOUNG ] AMOREPACIFIC CORPORATION and LG H&H, the two giants of K-Beauty, have secured growth momentum to offset their sluggish performance in Greater China by diversifying their portfolios into Western markets, including North America. Both companies demonstrated the results of their structural improvements by posting surprise earnings that exceeded market expectations in the second quarter of this year. In particular, LG H&H saw its North American sales surpass its Chinese sales for the first time, marking a clear trend toward reducing its reliance on China.

Following LG Corp., Amorepacific Also Exceeds Market Expectations

LG H&H(051900), the first among K-Beauty companies to release its second-quarter earnings on the 29th, reported revenue and operating profit of 1.6574 trillion won and 102.8 billion won, respectively, based on consolidated financial statements. These figures significantly exceeded the market expectations of 1.5599 trillion won and 72.2 billion won, as compiled by FnGuide Inc. This represents increases of 3.3% and 87.5%, respectively, compared to the second quarter of last year.

AMOREPACIFIC CORPORATION(090430), which announced its earnings on the 30th, also reported preliminary consolidated operating profit of 117.3 billion won, a 59.3% increase year-over-year. Revenue rose 17.0% year-over-year to 1.1759 trillion won, surpassing the average analyst estimates of 1.0846 trillion won in revenue and 97.0 billion won in operating profit.

For both companies, overseas operations drove these surprise results. While business in Greater China, including China, remains sluggish due to ongoing efficiency measures, overseas operations have diversified as the companies expanded their reach to North America, Europe, the Middle East, and South America.

In particular, performance in North America—a region where both companies have been focusing their efforts—was outstanding. AMOREPACIFIC CORPORATION’s sales in the Americas reached 210.4 billion won, a 57% surge compared to the second quarter of last year. LG H&H recorded North American sales of 205.8 billion won, a 47.3% increase from the same period last year, surpassing its sales in China (176 billion won) for the first time in a quarter. For AMOREPACIFIC CORPORATION, sales in the Americas are already nearly double those in Greater China (China, Hong Kong, and Taiwan), which stood at 124.5 billion won.

In fact, during last month’s Prime Day event hosted by Amazon, North America’s largest e-commerce platform, AMOREPACIFIC CORPORATION posted its highest-ever sales, with revenue up 20% from last year’s event. Brands already well-known in North America—such as Laneige, COSRX, Ilyoon, and Estra—as well as Mise-en-Scène, Etude, and Labo H, all ranked among the top sellers, demonstrating balanced growth. LG H&H’s flagship brands, Dr. Groot and Yushimol, also recorded sales growth rates of around 50% during the same period.

For AMOREPACIFIC CORPORATION, the brand Estra recorded triple-digit sales growth in the Americas on platforms such as Amazon and Sephora. Following COSRX and Innisfree, brands such as IOPE, Hanul, and Ilyoon are entering the market, expanding the company’s brand portfolio. LG H&H, which has been realigning its North American strategy around premium brands since the first quarter of last year, is leading its expansion efforts with brands like Dr. Groot and Yushimol.

In addition, results are becoming visible in other overseas regions as well. AMOREPACIFIC CORPORATION saw sales increase by 63% in Europe, the Middle East, and Africa (EMEA) and by 19% in Asia (excluding Greater China). COSRX led growth in EMEA, while Laneige drove growth in Japan. AMOREPACIFIC CORPORATION emphasized that it has further strengthened its global growth structure based on a multi-brand, multi-channel approach by simultaneously achieving sales growth and improved profitability.

Growth Expected in the Second Half of the Year

The growth momentum of AMOREPACIFIC CORPORATION and LG H&H is expected to continue

into the second half of this year

. AMOREPACIFIC CORPORATION plans to launch country-specific campaigns based on its robust brand portfolio, which includes not only COSRX—already well-known overseas—but also derma brands like Estra and Ilyoon, as well as Laneige and Innisfree. In the Americas, Estra recorded triple-digit sales growth, and Sulwhasoo is raising brand awareness by expanding its offline presence.

LG H&H’s Dr. Groot, following its launch in Costco stores across North America last October, is set to debut in Sephora stores in the U.S. starting next month. Dr. Groot is expected to grow as interest in K-Beauty extends to K-Haircare.

Park Hyun-jin, an analyst at Shinhan Investment Securities, predicted that “with the recovery of the (previously sluggish) duty-free channel in the second half of the year, the domestic business division’s profits will improve, and overall performance will rebound, driven by export demand from North America.”