LG Household & Health Care, 61 Consecutive Quarters of Operating Profit Growth (Comprehensive)

Despite COVID-19 Impact, 0.6% Increase Surpasses Market Expectations

[Asia Economy Reporter Yujin Cho] LG Household & Health Care announced on the 23rd through its Q2 earnings disclosure that its sales amounted to 1.7832 trillion KRW, a 2.7% decrease compared to the same period last year, while operating profit was tentatively recorded at 303.3 billion KRW, a 0.6% increase.

Due to the impact of the novel coronavirus disease (COVID-19), the influx of tourists disappeared, and the duty-free sales were hit by intense price discount competition among global cosmetics brands aiming to clear inventory.

As a result, growth in duty-free sales became difficult, leading to a decline in sales. Operating profit remained flat but showed slight growth, continuing an increase in operating profit for 61 consecutive quarters since Q1 2005.

For the first half of the year overall, the cosmetics division recorded sales of 1.9898 trillion KRW and operating profit of 399.8 billion KRW, down 11.5% and 15.3%, respectively, compared to the same period last year.

The decline in demand due to the sharp drop in tourist numbers caused by COVID-19 led to excessive discount competition to clear inventory, impacting sales. Despite the challenging business environment, ‘Whoo’ achieved a record of surpassing 1 trillion KRW in sales for the first half of the year, continuing its strong brand power and consumer demand from last year.

In the Chinese market, luxury cosmetics performed well during the largest event of the first half, the 6.18 Shopping Festival, and overseas business grew approximately 17% compared to the same period last year.

In the household goods division, sales reached 941.5 billion KRW and operating profit 128.5 billion KRW in the first half, growing 26.4% and 79.7%, respectively, compared to the same period last year.

High demand for hygiene products such as antibacterial tissues continued, and products like the microplastic-free fabric softener ‘Aura’ showed growth.

In the daily beauty division, which includes derma, hair, body, and oral care, premium lines such as ‘Dr. Groot,’ ‘Propolithera,’ and ‘Belmon’ achieved continuous growth. Through a digital channel strengthening strategy that actively reflects changing distribution trends, the division achieved a 47% increase compared to the same period last year.

The food and beverage business recorded sales of 748.2 billion KRW and operating profit of 108.7 billion KRW in the first half, increasing 4.8% and 35.8%, respectively, compared to the same period last year. Despite limited outdoor activities due to COVID-19, major brands such as ‘Coca-Cola,’ ‘Monster Energy,’ and ‘Georgia’ drove growth.

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