CJ Group's health and beauty drugstore CJ Olive Young showed stronger year-on-year performance in the first quarter, largely driven by robust sales in foreign markets and an increasing number of foreign visitors to Korea.

According to its regulatory filing Thursday, the company reported 1.08 trillion won ($797 billion) in sales for the first quarter of the year, up 30 percent increase compared to the same period last year. The profit figures were not immediately disclosed.

The company first exceeded the 1 trillion won quarterly sales mark in the third quarter of 2023. For the full year of 2023, CJ Olive Young recorded 3.86 trillion won in sales and 466 billion won in operating profits with profits increasing nearly 70 percent compared to the previous year.

CJ Olive Young attributed its success to improved performance in exporting Korean cosmetics products and the growing number of foreign visitors to Korea. Additionally, a diverse range of health and beauty products and the integrated operation of offline and online sales channels contributed to its performance, the company said.

The company's overseas sales reached 110.8 billion won last year, a 48.9 percent increase compared to 2022, with its global online mall's membership reaching 1.2 million. Meanwhile, sales from foreign customers at its outlets in Korea increased by approximately 660 percent over the same period.

"We continuously improve our product variety, membership services, store environment and app convenience to meet changing domestic consumer needs and the global K-beauty trend," an official from CJ Olive Young stated.

The stellar first quarter performance came after the exit of Glenwood Private Equity earlier this month. The Korean investment firm sold a 22.56 percent stake in CJ Olive Young to CJ Group at 780 billion won.

Industry experts say there is a high possibility that CJ Olive Young may choose to merge with CJ Group rather than its initial plan to go public, considering that CJ Group recently repurchased a stake in CJ Olive Young, a move seen as part of efforts to strengthen the owner family’s succession plan.

“If Olive Young pursues an IPO, it will face a complex process. However, merging with CJ Group through a stock exchange can simplify this," said Kim Soo-hyun, a researcher at DS Investment & Securities.

Currently, the biggest shareholder of CJ Olive Young is CJ Group, with a 51.15 percent stake. Lee Sun-ho, the eldest son of CJ Group Chairman Lee Jae-hyun, owns 11.04 percent of CJ Olive Young.

"Assuming Olive Young’s value is estimated at 4 to 5 trillion won, the eldest son could secure around 20 percent stake in CJ Group,” Kim added.