Customers visiting a cosmetics store located in a large department store in Seoul are shopping for cosmetics.  (Maekyung DB)
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After the mask was lifted, department store cosmetics sales surged… Cosmetics are on the rise all at once

Customers visiting a cosmetics store located in a large department store in Seoul are shopping for cosmetics. (Maekyung DB)

Cosmetics stocks are strong as news of a surge in cosmetics sales at major department stores in Korea continues.

At 2 pm on May 11, CTK is trading at 11,250 won, up 15.74% from the previous trading day. Tony Moly, Amorepacific, and Kolmar Korea Holdings, which are considered to be major domestic cosmetics stocks, also rose 3.9%, 1.79%, and 1.94%, respectively, and other cosmetics-related companies such as CSA Cosmic and iFamily SC also rose by 2-3%. all. Cosmetics-related stocks surged all at once in response to the government’s policy to remove outdoor masks on May 2nd, then entered a correction market and rose again on the same day.

The news that cosmetics sales in the first week of May increased by double digits in the first week of May at domestic department stores after the removal of outdoor masks is leading the upward trend. Shinsegae Department Store’s cosmetics sales in the first week of May (2nd-8th) surged 65.2% compared to the same period last year. During the same period, sales of color cosmetics at Hyundai Department Store also increased 37.5%, and total cosmetics sales rose 33.6%.

Cosmetics sales have already been booming since April on the expectation that social distancing measures will be gradually lifted. Shinsegae Department Store’s cosmetics sales in April increased 24% year-on-year. From April 18 to 24, Hyundai Department Store’s cosmetics sales also increased by 30.1% compared to the same period of the previous year, and Lotte Department Store’s cosmetics sales also increased by more than 20% during the same period.

As the duty to wear an outdoor mask was lifted from May 2, the industry explained that the weekly cosmetics sales showed a greater increase than before in the face of an increase in outdoor activities. Since April 18, cosmetics sales in the department store industry have increased by 20-30% compared to the sales in the first half of April. The department store industry held a cosmetic exhibition from the end of April with increasing demand for cosmetics in mind, which also helped increase sales in the cosmetics industry.

Analysts predict that cosmetics companies will see earnings improvement in earnest after 2Q. Park Seon-young, an analyst at the Korea-Teup R Association Research Center, predicted, “With the easing of social distancing and the lifting of the mandatory outdoor mask from May, an even sales recovery is expected, starting with color makeup.” Kim Hye-mi, an analyst at Cape Investment & Securities, said, “Once the re-opening begins in earnest and major channels such as duty-free recover, profitability will continue to improve along with sales growth.”

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Reference-www.mk.co.kr

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