Analysts say the outlook has brightened for d'Alba Global to hit this year's 500 billion won sales target, buoyed by results in key markets as it pushes overseas expansion with a "online first, offline later" strategy. d'Alba Global previously entered overseas markets through global e-commerce platforms such as Amazon and Qoo10, and recently has been actively moving into offline stores on the back of higher brand recognition.
On the 15th, financial data firm FnGuide estimated that d'Alba Global will post 524.9 billion won in sales and 126.8 billion won in operating profit this year. That would be up 69.8% and 111.9%, respectively, from a year earlier. Earlier, Chief Financial Officer Yang Se-hun of d'Alba Global raised the company's sales target for the year to 500 billion won from 450 billion won set at the start of the year during the second-quarter earnings conference call.
d'Alba Global recently signed a contract worth 2.9 billion won to supply products to Costco's offline stores in the United States. The volume is an initial shipment, and the supply scale will change depending on sales trends in the United States. This is the first time d'Alba Global has supplied products to a major offline distribution network in the United States.
d'Alba Global's entry into North America was built on its online success through Amazon. Entering the U.S. market in 2022, d'Alba pushed its flagship product, "First Spray Serum" (also known as the flight attendant mist), steadily climbing the sales rankings on Amazon U.S. Until the second half of 2024, the product had remained outside the top 100 in Amazon's beauty category, but it jumped to No. 35 in March this year. In the first half of this year, sales of d'Alba Global products on Amazon U.S. and TikTok Shop rose 100% and 198%, respectively, from a year earlier.
In the second half, d'Alba Global is also seeking to place its products offline at Ulta Beauty, the No. 1 beauty specialty chain in the United States, and big-box retailer Target.
d'Alba Global is also actively pursuing offline expansion in Japan. The number of stores carrying its products in Japan was only around 600 in the first half of last year, but grew to 2,800 in the first half of this year. d'Alba Global is targeting 4,000 by year-end and 20,000 to 30,000 next year.
Japan is the market where d'Alba Global's online-first, offline-later strategy has proven most successful. Since entering Japan in 2021, d'Alba has focused on major local e-commerce platforms and boosted awareness through word of mouth in the cosmetics rankings on @cosme, Japan's largest beauty information platform.
In Europe as well, d'Alba Global is pursuing a strategy of building recognition via Amazon Europe as a bridgehead, then moving into offline channels. Launched in the United Kingdom and Germany at the end of 2023, the d'Alba brand quickly climbed into Amazon's bestseller ranks, reaching No. 1 in Amazon Spain's beauty category and No. 3 on Amazon Germany.
However, d'Alba Global's share price has been falling recently. The stock, which listed on the main board on May 23, hit a peak of 247,500 won on 8th last month, but closed at 162,800 won on 12th.
This came even as second-quarter sales and operating profit rose 74% and 66%, respectively, from a year earlier, because operating profit came in about 19% below the existing securities firm consensus. Brokerages attributed this to additional payments of value-added taxes and the deferral to the third quarter of 5 billion won related to Russia business-to-business (B2B) transactions.
The expiration of lock-up periods on a substantial portion of outstanding shares is also seen as capping the stock's rise. On 22nd last month, the lock-up on about 1,955,709 shares, or roughly 16.2% of total shares, was lifted at d'Alba Global. The market is worried about the resulting overhang (potential selling pressure).
Lee Hae-ni, an analyst at EUGENE INVESTMENT & SECURITIES, said, "d'Alba Global is minimizing distribution through vendors that take intermediate margins during its overseas expansion. Its mid- to long-term strategy is to maximize margins through direct entry."