AmorePacific Corp., the country's top cosmetics maker, said Monday its third-quarter net profit plunged 32 percent from a year earlier, due largely to a protracted slump in the domestic market amid a sharp decline in Chinese tourists.
Its net income came to 79.8 billion won (US$70.9 million) in the July-September period, compared with 117 billion won the previous year, the company said in a regulatory filing.
The operating profit for the cited period also fell 39.7 percent on-year to 101 billion won, with sales plunging 13.6 percent to 1.21 trillion won from a year earlier.
The company attributed the poor showing to the drawn-out slump in its domestic sales, along with a decrease in inbound tourists from China, which followed the Beijing government's ban on sales of South Korea-bound package trips beginning mid-March amid diplomatic row over the deployment of a U.S. missile defense system here.
Such developments it said were the main factors weighing on profits.
"Fixed costs increased due to a fall in sales, while increased spending also ate into operating income," the company said.
AmorePacific said the Asian market is showing signs of a recovery, while sales in Europe and North America declined due to a variety of factors.
The combined operating income of AmorePacific Group, which includes its smaller brands like Innisfree and Etude, as well as other household products, reached 132 billion won in the third quarter, down 39.7 percent from a year ago. Total sales also dropped 14.2 percent on-year to 1.42 trillion won.