1. Clio’s Q2 Earnings Miss Estimates

Clio reported sales of 82.1 billion KRW and operating profit of 3.5 billion KRW in Q2 2025, missing market expectations by 4% and 34%, respectively. Net profit turned positive at 1.9 billion KRW, but this improvement was marginal compared to the significant decline in operating profit.

2. What Drove the Underperformance?

Several factors contributed to Clio’s disappointing Q2 results, including intensified competition in the domestic cosmetics market, weakened consumer sentiment due to high interest rates and inflation, and increased marketing and administrative expenses. Challenges in reducing reliance on the Chinese market and expanding in the US market also played a role.

3. Clio’s Future Outlook

In the short term, the key focus will be on whether Clio can improve its performance in Q3 and beyond. Factors such as recovering consumer sentiment, continued growth in overseas markets, and cost optimization will be crucial. In the long term, Clio’s brand power, new business ventures, and global expansion plans offer growth potential. However, improving profitability remains a key challenge.

4. What Should Investors Do?

The short-term investment outlook for Clio is ‘Neutral’ due to the downward pressure on its stock price following the weak Q2 results. Investors should reassess their investment strategy after observing the company’s Q3 performance. The long-term outlook is ‘Hold’. While Clio’s fundamentals and brand competitiveness are positive, investors should closely monitor the company’s ability to overcome its short-term challenges and improve profitability.