LG Household & Health Care's Q3 Operating Profit Up 52%... Beauty Business Loss Narrows

Revenue held near year-ago levels at KRW 1.5774 trillion, despite Avon’s exclusion
Major brands, including The Whoo and Dr. Groot, grew
Overseas revenue declined

LG Household & Health Care increased its operating profit in the third quarter of this year by 52.4% year on year, successfully improving profitability. While losses in its core Beauty business narrowed significantly, its Home Care & Daily Beauty (HDB) business continued to grow sales.

LG Household & Health Care said in a regulatory filing on November 3 that it posted consolidated revenue of KRW 1.5774 trillion and operating profit of KRW 70.4 billion in the third quarter. Revenue edged down 0.2% year on year, remaining at a similar level, while operating profit rose 52.4%. Although results from its North American subsidiary, The Avon Company (Avon), were excluded from consolidation starting in September following its sale, the company maintained its revenue level.

By business segment, profitability improved notably in Beauty. Third-quarter revenue was KRW 660.8 billion, down 0.3% year on year, while the operating loss narrowed significantly to KRW 10.9 billion. Luxury brand The Whoo returned to growth, supported by a recovery in duty-free sales, while major brands including Dr. Groot, Dominas, Euthymol, and VDL also grew. The recovery in the duty-free channel and improved efficiency at offline stores contributed to better profitability.

The HDB segment posted revenue of KRW 419.2 billion, up 3.8%, but operating profit fell 3.1% to KRW 31 billion. Sales increased across major online and offline channels, but marketing investments to strengthen brand competitiveness weighed on profitability. FiJi Moraxella, 46cm, and Homestar supported sales.

The Refreshment beverage business underperformed. Revenue fell 3.1% to KRW 497.4 billion, while operating profit declined 19.9% to KRW 50.3 billion. Weaker beverage demand, higher raw and subsidiary material prices, and intensifying promotional competition weighed on results.

Overseas revenue was KRW 432.3 billion, down 12.5% year on year. Revenue in North America and China fell 12.5% and 21.1%, respectively. However, excluding Avon, North American revenue grew by about 5%. The company is also expanding its local distribution network, with Dr. Groot now available at more than 400 Sephora stores across the United States.

A representative of LG Household & Health Care said, "We will nurture strategic brands based on differentiated product competitiveness and expand in global markets to strengthen the foundation for mid- to long-term growth."

At a board meeting on the same day, LG Household & Health Care decided to acquire an additional 25% stake in VivaWave, which operates the color cosmetics brand Hince. This will give the company full ownership of VivaWave.

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