The company said it was affected by various adverse factors such as the spread of the COVID-19 Delta variant, global supply chain shocks and rising prices of major commodities. “made 3Q very difficult”.
In particular, the company said sales were down slightly due to “loss of sales opportunities due to the intensification of the logistics crisis ”Before the mega shopping events in November, Singles Day and Black Friday.
However, the performance of luxury cosmetics and premium products saw their profitability improve. Operating income increased 4.5% year-on-year.
Despite the difficult quarter, the company broke records with Full Year Cumulative Profits (YTD), which recorded a 5.5% year-over-year sales increase to KRW6.1tn (5.2 billion dollars) while operating profit increased 8.7% year-on-year to KRW1tn (853 million USD).
Highs and lows
The beauty division, which includes brands such as History of Whoo and Su: m37, reported third quarter sales of KRW 1.26 billion (US $ 1.07 billion), down 10.2% compared to the same period of the previous year.
The division, which accounts for the largest share of its overseas business, suffered the largest loss of any division in terms of sales opportunities due to global logistical complications.
However, despite the challenges, the company continued to launch new products and interact with consumers through various activities.
Whoo launched the 12th Special Enhanced Edition of its Bichup Jasaeng Essence while Belief and VDL have collaborated to launch a vegan makeup line targeting millennials and Gen Z consumers.
As a result, the division saw its profitability improve by 9.0% to KRW 215.4 billion (USD 184m)
The Home Care and Daily Beauty (HDB) division, which has a portfolio of skin care, hair care and oral care brands, saw sales increase 6.1% to KRW 540 billion ( $ 461 million).
This has been attributed to the strong demand for hygiene products led by brands such as Physiogel as well as the bamboo Salt oral care brand.
However, profitability suffered from a sharp rise in commodity prices. This drove operating profit down 4.7% to 64 billion won ($ 55 million).
Despite this, beauty and hygiene products remain the main growth engine of the HDB division.
To continue its growth, the company has made efforts to diversify and differentiate its portfolio by securing new brands.
In March, the company acquired the UK premium toothpaste brand Euthymol. Subsequently, she acquired the American vegan hair care brand Arctic Fox, which is popular among millennials and millennials.
Daily Beauty, HDB’s main growth engine, continued to diversify and differentiate its portfolio by securing new brands and nurturing existing brands.
HDB continued to strengthen its line of premium brands both nationally and internationally by acquiring “Arctic Fox,” a trendy vegan haircare brand that is catching the attention of the MZ Generation in the United States, continued the acquisition of “Euthymol”, a British premium toothpaste brand. with a strong fan base, last year