LG Household & Health Care Achieves Record Q1 Performance Despite COVID-19 Challenges

[Asia Economy Reporter Yujin Cho] LG Household & Health Care (CEO Cha Seok-yong) announced on the 23rd that its operating profit for the first quarter grew by 3.6% year-on-year to 333.7 billion KRW.

During the same period, sales reached 1.8964 trillion KRW, and net profit was 234.2 billion KRW, growing by 1.2% and 3.7% respectively compared to the same period last year. Despite the rapidly shrinking domestic and international business environment due to the novel coronavirus disease (COVID-19), the company continued a slight growth trend, recording the highest sales and operating profit for the first quarter.

LG Household & Health Care stated, "Although the Chinese market was not operating normally due to the impact of COVID-19, the beauty business minimized the shock of sales and operating profit decline thanks to strong demand for luxury brands."

The household goods business recorded significant growth, with sales and operating profit increasing by 19.4% and 50.7% year-on-year respectively, driving the overall company performance. The beverage business also achieved solid results based on stable growth of key brands.

Compared to the same period last year, sales have grown for 58 consecutive quarters since Q3 2005, and operating profit has increased for 60 consecutive quarters since Q1 2005.

By segment, the cosmetics business recorded sales of 1.0655 trillion KRW, down 6.4% year-on-year, and operating profit of 221.5 billion KRW, down 10.0%.

Due to the full-scale impact of COVID-19 since February, sales in major channels of the domestic and overseas cosmetics markets sharply declined, and the duty-free channel was severely hit by a significant decrease in foreign tourists, including Chinese visitors. On the other hand, the ultra-premium lines of ‘Sum’ and ‘O Hui’ grew based on high demand, and the derma cosmetics brand CNP also achieved 13% sales growth.

The household goods business achieved sales of 479.3 billion KRW, up 19.4% year-on-year, and operating profit of 65.3 billion KRW, up 50.7%. There were market changes such as weakened consumer sentiment, avoidance of multi-use facilities like large supermarkets, increased demand for hygiene products, and increased usage of online and small supermarkets.

Supported by steady growth of premium brands such as Dr. Groot, Belmon, and Himalaya Pink Salt, the company achieved high growth by promptly responding to consumer needs and distribution changes caused by COVID-19 through the launch of various antibacterial hygiene products including hand sanitizer gel, hand wash, wet wipes, and single-sheet dishcloths.

The beverage business recorded sales of 350.5 billion KRW, up 5.0% year-on-year, and operating profit of 46.8 billion KRW, up 43.9%. Although there were difficulties due to reduced theater attendance, outdoor activities, and dining out caused by COVID-19, sales growth was driven by increased demand through delivery food and online channels. Carbonated beverages saw a 9% increase in sales year-on-year thanks to growth of brands such as ‘Coca-Cola’, ‘Monster Energy’, and ‘Seagram’, while non-carbonated beverages maintained steady growth with key brands like ‘Powerade’ and ‘Georgia Craft’.

This content was produced with the assistance of AI translation services.