Good morning, and welcome everyone. This is Jae-ha Shin , Executive Vice President of APR. Thank you for joining our first quarter 2026 earnings call. We sincerely appreciate the continued interest and support from our shareholders and investors. Today, we will start with the performance review, followed by a Q&A session. Please note that our results are preliminary and subject to change during the audit process. Furthermore, any forward-looking statement reflects our current outlook and may be impacted by market volatility. With that, let's review our results for the first quarter of 2026. Please turn to page three, quarterly revenue trends. In the first quarter of 2026, APR recorded consolidated revenue of KRW 593 billion , achieving another record high quarterly performance. While the first quarter is typically considered a seasonally slower period, we continue to see strong demand and growing brand awareness across global markets.
As a result, revenue surpassed the previous quarter, reaching nearly KRW 600 billion , marking a new quarterly high. This quarter demonstrates our ability to overcome seasonality through sustained demand with growth momentum broadening across regions such as Europe, Southeast Asia, and Latin America, leading to another phase of record growth. Next, please turn to page four for our first quarter results. In the first quarter of 2026, APR once again delivered record high quarterly revenue and operating profit. Revenue increased 123% year-over-year to KRW 593 billion , while operating profit increased 174% to KRW 152 billion . Our operating margin reached 25.7%, up 4.8 percentage points from a year earlier. As a note, APR has only adopted IFRS 18 starting from 2026. For comparability, the prior period's financial information in this presentation has been restated on the same basis.
Please note that some restated figures may differ from our previously disclosed material. Next, please turn to page five for our revenue breakdown by business division. Starting with the cosmetic division, revenue reached KRW 453 billion , up 174% year-over-year. Since the first quarter of 2025, this division has delivered triple digit growth for five consecutive quarters, surpassing KRW 450 billion in quarterly revenue and once again setting a new all-time high. The cosmetic division is also building a more balanced growth structure, with sales no longer concentrated in only a few products. All of your products, such as the Zero Pore Pad, continue to perform strongly, while newer products are also becoming key growth drivers, supporting growth-based growth across multiple SKUs. This trend is also reflected in our PDRN product line.
As global awareness continued to expand, cumulative sales of PDRN products surpassed 50 million units in February. Moving on to the home beauty device division, revenue reached KRW 133 billion , increased 46% year-over-year. Demand remains solid in key markets, while expanded regions and channel supported steady growth in new markets, leading to another record high quarterly result. In the first quarter, we also launched Booster Pro X2, the next generation model of our flagship device, Booster Pro. With upgraded performance and newly added modes, it further enhanced both the technology and the user experience of our device lineup. Lastly, revenue from the other division declined 20% year-over-year to KRW 8 billion , mainly due to the reduced contribution from non-core businesses. Please turn to page six, first quarter results by regions.
In the first quarter of 2026, overseas revenue reached KRW 528 billion, representing a 180% increase year-over-year. Since the second quarter of 2024, our overseas revenue has reached a new quarterly high for seven consecutive quarters. The overseas sales mix also increased significantly, rising from 71%- 89% this quarter. The growth led by the U.S. continued to expand globally, with the U.S. and others region together accounting for 74% of total revenue. We will provide further regional details on the next page. Please turn to page seven for the regional revenue details in the first quarter of 2026. Despite the usual seasonal slowdown in the first quarter, APR continued to deliver strong growth as awareness of both our products and our brands expanded across global markets.
At the same time, we strengthened our global competitiveness by broadening our best-seller lineup and expanding our sales channel in line with rapidly growing demand. Let me walk you through the performance by region. Starting with Korea, revenue reached KRW 65 billion. The domestic business recorded negative growth, mainly due to the reduced contribution from non-core business division. In the United States, revenue reached KRW 249 billion, representing a 251% increase from a year earlier. Our best seller portfolio continued to expand while demand remained solid across online channel. This is also reflected in the gradual increase in Medicube's market share across key channels. On the offline side, following our entry into the Ulta Beauty in August 2025, we further accelerated expansion by launching in Target in April this year.
Going forward, we plan to further strengthen our position in online channels while also increasing brand visibility and diversifying our growth base through broader online expansion. In Japan, revenue reached KRW 59 billion, up 101% year-over-year. Demand remains solid, resulting in more than a doubling of revenue from a year earlier. We also saw both online and offline channel grow together with synergies between the two channels continuing to expand. In Greater China, revenue reached KRW 31 billion, increased 8% year-over-year. Lastly, in other regions, revenue reached KRW 190 billion, representing 216% growth year-over-year. After surpassing KRW 100 billion in quarterly revenue for the first time in the first quarter of last year, demand continued to expand across global markets, leading to another quarter of very strong growth. Please refer to page eight for our summarized consolidated financial statement.
This final summary is provided for the reference purposes only. This concludes the APR's earnings call for the first quarter of 2026. We will now move on to the Q&A session. Thank you.
We will now begin the Q&A session. If you would like to ask a question, please press the star followed by one on your telephone keypad. To cancel your question, please press star followed by number two. The first question will come from Yoon Hae-jin of KB Securities.
Good morning. Congratulations on the strong results. I have two questions. First off, the first quarter result was really good, and I wonder if you will update the guidance. The driver should be from the U.S. and Europe. If you have any detailed figures, please share it with us. Second, going forward to the second quarter, you said at Costco and Walmart will have your products. What are your expectations regarding revenue by quarters and by years? Due to the geopolitical risks, there might be some increase in cost. KIndly provide information on that?
Regarding guidance and upward according to guidance, we do not really plan to provide an upward estimation in the guidance. The first quarter surpassed our guidance, so this is my personal idea. We believe that we will reach KRW 2 trillion in revenue, and we are very active in our businesses. As you said, in Europe and in the United States, we have our own targets. We cannot really reveal and disclose a specific target in revenue for those two regions. Maybe in a separate IR session, we can provide the numbers. This is an official release, but according to Bloomberg, we shared the information with Bloomberg, and we plan to enter Costco and Walmart. We will. Specific schedules will be announced later.
What we can tell you at this moment is that going through second and third quarters, we will enter those two markets, Walmart and Costco. Regarding the targets, yearly targets and quarterly targets by channels are not yet set. Like I said, offline sales mix in the United States has been remaining at 20%. Regarding the impact of the Middle East issue, of course, raw material prices have been surging. With our suppliers, we have been discussing how we can calm down the impact, and we are very closely working together with our suppliers. There should be some changes in cost, but how many percentages will be increased are not really estimated yet, but it should not be that large. The thing that we are concerned about is logistics, because last quarter, logistics cost has increased a lot.
There should be two factors behind the large increase in logistics. As you understand, our sea freight is not really going smoothly, especially for the long distance, like to the United States and Europe, the freight cost has increased a lot. Plus, the portion of the air freight is quite high and coming into this year, the portion of air freight has been increasing even further. The cost of air freight will make an impact. To reduce air freight and to make logistics cost more efficient, under the circumstance of the rapid increase, the supply chain should be stabilized. For the product, our supply should be also stabilized. These issues are being resolved at the moment, but at the same time, we would like to also tell you that the demand at the global level is increasing.
Supply becomes short, and this is the repetitive cycle and patterns of the demand and supply from our side. Coming into the latter half of this year, we believe the supply chain, the bottleneck issues, will be resolved to a large extent, we believe. Next question, please.
Next question is from Goldman Sachs, Diane Kang. Please go ahead with your question.
Well, thank you very much, and I'm really happy to hear all the good news. I have questions about the European market specifically, and sales by region, you have this information, and you have KRW 70 billion increase. Is that mainly coming from the U.K.? I believe that your sales have been recorded since March, but I think the sales from Sephora and other retailers I think are very significant. I'm curious, is that mainly coming from the U.K.? Also, on offline market, I would like to know a lot more since you have been expanding in the offline market as well. The execution itself might be different from online markets. What is your offline market strategy? For example, stock management or sales and marketing management, what is your strategy?
If you are interested in increasing labor or people, then I would like to know more about this information.
In other regions, including the U.K. or across all European markets, I think we still have upside potential. According to our business strategy, I cannot give you specific information about other regions at this point of time, and I'd like to give you a color instead across all European markets, the U.K., for example, in Amazon or TikTok, online marketplaces, we are having really significant growth. We have significant growth in the first quarter in other regions such as France and Spain, Germany. We're starting to run online markets, and because of supply chain issue, and because we started selling our product in the U.K., I think we have some different market growth. Still, just we started selling our products in the U.K., and the U.K. market is very significant, and also B2B market revenues are included in the European market, and B2B revenues are also significant.
When it comes to offline market strategy, we believe that it is very important. When it comes to priority, of course, the U.S. and the Western or European market expansion will be very important in our strategy. When demand is created, then we can expand in the offline markets. I believe that we can increase sales in offline markets over the years to come and in the local global markets in order to operate our brands. Instead of recruiting in local labor markets, we would focus more on communication and design our strategy and help the local partners and help global sales partners to execute sales our brands in the local markets. Next question, please.
The next question will come from Park Jungmin of Daewoo Investment & Securities. Please go ahead with your question.
Good morning. Thank you for this opportunity to ask you a question.
I have three questions. First off, K-IFRS is applied now, so the figures have been changing a little bit. Before applying the new regulation, the OP in size is KRW 145.6 billion. The operating profit is quite large in others. For the B2B portion, I am wondering the information, the sales mix of the B2B, and looking at the details of SG&A and marketing and the transportation cost, how much portion of the two are representing?
Before applying IFRS. For the number 18 of that regulation, that standard and the operating profits are reflected there. To follow the global standard, we decided to apply it earlier than the regulation set. You mentioned the difference between before and after the IFRS, and regarding the other revenue, there is no changes. Regarding the foreign currency conversion and so on, there have been some changes.
It is a little hard to disclose much details, but for more details, on May 15th, we are going to provide announcement. We are going to share more details on that day. Next.
Yes. My name is Cha Tae-young, I am the communication team. Regarding the second number, regarding in other region, you mentioned the proportions of vendors. We have many vendors, so it is really hard to break all down. Those vendors we call cross-borders at the global level, and their proportion as of the first quarter is 40%, a little 40%. Regarding the first quarter, you also asked about cost compared to revenue. SG&A, 19%, and the commission is 17%, and transportation, 7%. That should be the gross figures.
Next question, please.
There is no one asking questions. If you want to ask a question, please press star and one. Next question is from Hanwha Securities, Han Yoo-jeong. Please go ahead with your questions.
Hello. I am happy to hear all the good earnings and thank you for having me. I think your earnings in Q1 is very good. Sustainable revenue growth and guidance would be very pleased to hear. I would also like to listen to the color in Q2 and also home beauty device. What is your roadmap? I would like to hear an update, if you have any.
As for now, I think profitability in Q1 can be sustainable or not. I think it can be sustainable. I cannot give you the specific scope. However, I believe that profitability can remain, because in Q1, we were not in the situation to optimize because of the stock shortage and logistic price expenditures, and there were some inefficiency in operating perspectives. In marketing expenses, I believe we have spent similar amount of money, QoQ.
However, still profitability remains and sales increased. Still we have really good OP margin. In my opinion, as for now, the OP margin remains healthy and remains similar and will also remain similar. To give you the color in Q2, I believe we will maintain healthy growth in Q2 as well because we have seasonal factor because it will be off-season or low season. Still, the demand and sales are very good regardless of the seasonality. So I believe the sales in Q2 might be similar to Q1 or will edge up a little bit, in my opinion and perspective. When it comes to home beauty devices, Booster Pro X2 have been launched domestically and in near countries, but still in different countries, old versions are still selling.
So at the end of the first half of this year in Europe and the U.S., this Booster Pro or new version or X2 will be launched. Recently there was an announcement, the ultrasonic device. In Korea and in Asian countries, this device will be launched.
As well. So this will be another factor to our growth. Additionally, aside from these two devices, there will be a couple of more devices to be newly launched in the market. So I will answer next questions. Thank you very much.
There is no participants on the queue for questions. If you would like to ask a question, please press the star key, followed by number one on your keypad. The next question will come from Ok-dong Jin of Shinhan Investment Securities. Please go ahead.
Good morning. Thank you for this opportunity to ask a question. Revenue in Korea has been a little decreasing. You said non-core business. Are you talking about Nerdy or something else? Second, cosmetics is really good in revenue. Yes, I can see very clearly Medicube is going well, and the categories is expanding and also the markets are also expanding.
How about Aprilskin? For example, mask packs, face mask packs, and some pack. I am wondering about Aprilskin's performance. Also, you said you are going to enter some marts in the United States, and the products sold in Amazon will be displayed in those marts? Thank you.
Regarding domestic businesses, yes. The impact of the fashion division is quite large still. Medicube is increasing both home and abroad, but Forment and Glam.D and other non-core businesses have decreased although albeit slightly. There has been a change in space mix. Rather than our own website, we are focusing on Olive Young. Revenue recognition is different between Olive Young and on our own website. So when those products are sold in Olive Young, the revenue numbers might be decreased in accounting.
For Booster Pro X2, at the end of first quarter, we launched the Eve, and then we also stopped selling the older version, and that is why the revenue decreased a little bit. For Aprilskin, as you said, in Korea, Japan, and the rest of the Asian region, tint, which is a lip product has been a major product that has been sold very well. But we have some concerns in Aprilskin because there are not many hero products. So we have to diversify our products in Aprilskin business. At the global level, we are expecting growth YoY. Based on this growth, maybe we can sell those products beyond Asia, expanding the business to the United States and European markets. But at the moment, we focus on Medicube for those markets as well. As SKU strategies, the Amazon and March products are saying that is what you asked.
We cannot really disclose any details, but of course, the demand is expanding from online to offline, and that is why we see an increase in revenue at offline channels as well. But of course, there are much more of revenue coming from online. Top products are launcher in displays of the offline markets as well. But the number of channels per se are increasing. But of course, we are going to differentiate the products that we sell by retailers. For example, for certain items, we are preparing Walmart or Ulta Beauty's exclusive products. To sum it up, as the best picture, we share the SKUs, but by channel mixes, we also provide some custom-made products sales. Next question, please.
Next question is from Kyobo Securities, Kwon Woo-jung. Please go ahead with your question.
Well, thank you for having me. I have three questions. First, the U.S. offline market in Q1, Ulta and Target's sales might be recognized, and what is the size of sales from the U.S.? My second question is about, you told about air freight in Q2. I am curious about the increase extent from air freight. My last question is about tariffs, especially in the U.S. I am curious about the size of duty drawback or tariff refund, and I am curious about the size and profit gains and loss.
Let me check this part and get back to you. In Q1, offline market sales recognition, I think the size is not very significant, so to give you rough information, I think it is about 10%. From offline, the sales will gradually increase. The second question was about air freight, right?
The air freight might be different based on the standard of recognition by country or region. However, we spent a lot of money in Q4, and quarterly expense for air freight is about KRW 10 billion , and I think the cost increased in Q1 as well for air freight. I believe that we spent about KRW 20 billion for air freight in Q1. If I am right. When it comes to air freight cost, I believe that the cost will remain high a little bit in Q1, but it will be a little bit smaller than Q1, and the cost will also decrease in Q3. When we have enough safety stock through better SCM, then the air freight cost will decrease. We are trying to solve these issues. The impact from tariffs.
I think the amount of tariff refunds, as far as I know, for the confirmed amount, is about KRW 20 billion , and it is not coming from at once. It will be installment, so as soon as in Q2, I think the amount will be recognized from Q2, and the point of time is not confirmed yet, and the amount is not confirmed yet either. We are getting this refund, and starting from Q3, we are starting to recognize this amount of tariff refund. For retrospective amount, I think maybe we should wait until the end of this year. I will take that question. Thank you very much.
The next question will come from Park Eun-jung of Hana Investment Securities. Please go ahead.
Thank you so much for another opportunity to ask a question. I have a question regarding Amazon in the European market. Your experiences in the U.S. market for Amazon was very good. Including that, when do you expect the online channel contributions to be seen visibly in European Amazon? In Europe markets, including the U.K., Spain, and Germany, is expectedly going well. Continuing from what I said just now, can you please share with us more details regarding online sales in the European markets? Lastly, the size of the markets. Amazon contribution in the U.S. market is 60%, you said. How about European Amazon market? Is it similar? I mean, the 60% is pretty much the target for the European Amazon market as well? Thank you.
For your first question. When do we expect the online channels contribution to save this, right? In European markets, yes. Actually, in the Q1, we have seen the contribution. It already started coming up. By quarters, over time, the contribution ratio will increase. Even on about monthly basis, we see the increase and promotional and events and influencers collaborations are strengthened. From early this year, we set up and we built up the team for European markets. Of course, there should be some learning curves of our teams compared to the United States, which is the existing market. We still believe that we will see a better result in the second quarter. After the U.K., France, Germany, Spain, and Italy are the markets that we
have high expectations, but it is not necessarily about the second quarter and how much we see an increase in revenue there, because we do not have any data yet. In the U.K. market, we have seen a rapid growth. Based on the learning curve from the U.K. experiences, maybe we can see an increase in revenue in those other markets. Not only Medicube, other K-beauty brands are performing very well in our target markets as well. That is a very good stimulus for us, and also that is a really good benchmark as well. In this call, we cannot really disclose the online market performance, because that is our policy, confidentiality policy. The sales mix of the online/offline, like I said, in the U.S., online marketplace ratio is higher.
In European markets, out of 28 countries, online marketplaces are running in five only, and we started it from this year. So the sales mix of online and offline are 5:5 , 50:50. We believe that online contributions will increase over time. At this moment, the ratio is 50: 50 in online and offline sales mix. Next question, please.
Next question is from Shinhan Securities, Park Hye-jin. Please go ahead with your question.
I think I have heard it wrong. In Q2, the sales guidance or your targets revenue might be similar to Q1 according to your earlier statement. Is that right? I think we're expecting Prime Day in Q2, so it might not be similar to Q1. Can you double-check it? Also in the U.S., you have started selling your products in Ulta from last year, and your sales have grown QoQ. What is the sales in Q1? I'd like to double-check also. Thank you very much for your answer in advance.
The revenues in Q2 is your question, right? Let me double-check. I said the sales in Q2 might be similar to Q1 or will edge up a little bit in Q2.
That's what I mentioned earlier, because Q2 normally is off-season or slow season still, but our operating profit will be healthy. Amazon Prime Day is planned for June, and I believe that it will be late June, so it will not be recognized for Q2 sales. I did not include that promotional day in Q2. That's why I said sales in Q2 might be a little bit similar to Q1 or edge up a little bit because I did not include that promotional event. This is not official guidance, and this is my personal opinion or my perspective to give you a color on the guidance. But I'm still positive for Q2 sales expectation. Sales from Ulta QoQ increased in Q4 and what it is in Q1.
I don't have any numbers right now and based on channel mix, it is really difficult for me to give you the breakdown by channel because I don't have exact data right now. Let me double-check it across all offline channels. If I have any chance for IR call later, then I will give you the exact information.
I think there is no additional question right now, so we will conclude this Q&A session and close our conference call for today.
Thank you very much once again for joining us today out of your busy schedules, and thank you for your attention and interest. I would like to look forward to your attention and interest. From now on, we would like to close our conference call. Thank you very much.