The South Korean beauty conglomerate says its global revenue fell by 9 percent to 1.3 trillion won ($1 billion), with operating profit down 13.4 percent year-on-year to 171.2 billion won.

Market instability in China – which accounts for 70 percent of the group’s sales in Asia – resulted in revenue declining by 10 percent as stores in multiple cities were temporarily closed due to Covid-19 outbreaks. The company expects China sales will continue to be impacted by Covid in the second quarter with government movement restrictions not yet relaxed in Shanghai.  

Despite achieving 63 percent growth in North America, overall international sales failed to improve, falling 6.1 percent, with operating profit down 19.5 percent on year. Domestic revenue was also down, by 9.9 percent, despite strong online sales which surged by more than 20 percent. The downturn was impacted by a double-digit drop in travel retail revenue due to the resurgence of Covid-19 in South Korea.

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