Cosmax posts record quarterly sales in Q3 as operating profit nearly doubles

Global cosmetics ODM company Cosmax posted record quarterly sales in the third quarter of this year, driven by its Korea unit crossing the 600 billion won mark for the first time alongside broad-based growth across its US, China and Southeast Asian operations.

Cosmax disclosed Wednesday that its consolidated sales for the third quarter reached 875.8 billion won ($652 million), up 50% from the same period a year earlier. Operating profit for the period rose 95% to 83.3 billion won.

The cosmetics industry typically follows a pattern of stronger first-half results and softer second-half performance, but Cosmax broke that trend by setting an all-time quarterly sales record even in the third quarter, which is generally considered the off-season.

The Korea unit led the earnings growth. Its third-quarter sales reached 616.1 billion won, up 61% year on year and 19% from the previous quarter — surpassing the 600 billion won quarterly threshold for the first time.

The company said the increase was driven by major customers expanding their online marketing and entering overseas brick-and-mortar markets, which boosted order volumes. In the skincare segment, demand for existing products remained steady while inquiries for new derma cosmetics development also increased. Color cosmetics likewise recorded double-digit growth on the back of an expanded lineup of new product launches.

Growing orders for high-margin products such as essences and mists pushed the Korea unit's operating profit up 97% year on year to 67.7 billion won.

Overseas units also continued to grow. The China unit posted consolidated third-quarter sales of 177 billion won, up 27% year on year. The Shanghai operation was lifted by expanded orders from color cosmetics brands with strong recognition in local and Asian markets, as well as new skincare product launches. The Guangzhou operation diversified its customer base through sun care products and kids and baby skincare lines.

The US unit's performance was particularly strong. Its third-quarter sales reached 69.5 billion won, up 88% year on year, supported by repeat orders and product line expansions from existing customers as well as a rise in development requests spanning skincare categories including creams, essences, masks and sun care.

Notably, the US unit recorded an operating profit for the second consecutive quarter, having achieved its first-ever quarterly profit in the second quarter. Shortening product development timelines through collaboration with the Korea headquarters and strengthening customized responses for individual clients contributed to the improvement, the company said.

Sales also rose in Southeast Asia. The Indonesia unit posted third-quarter sales of 28.8 billion won, up 34% year on year, supported by a recovery in sales from existing customers and new product launches. The Thailand unit recorded sales of 16.2 billion won, up 7%, driven by new customer additions and an expansion of skincare development projects.

A notable feature of this quarter's results was the simultaneous improvement in the Korea unit's growth and the profitability of overseas operations. The US unit in particular extended its earnings recovery by posting operating profits for two consecutive quarters, while high-margin product orders bolstered operating profit at the Korea unit. Sustaining the growth momentum going forward will likely depend on whether key customers continue to expand orders and overseas units maintain their path to profitability.

"The sharp growth of the Korea unit and the simultaneous expansion of our global operations allowed us to set another all-time quarterly sales record even in the typically slow third quarter," a Cosmax official said. "We will further solidify our position as the world's No. 1 cosmetics ODM company, backed by our unrivaled R&D capabilities and manufacturing capacity."