LG Household & Health Care Returns to Profitability in Q1 Driven by Restructuring and Strong North America Sales Growth
Seoul, South Korea — LG Household & Health Care (LG H&H) announced Sunday a significant return to operating profit in the first quarter. This positive shift is largely attributed to successful restructuring efforts and a substantial surge in North American sales, even as the company acknowledges a continued lag in annual growth compared to the previous year.
For the first quarter, LG H&H reported an operating profit of 107.8 billion won (approximately $73 million) on total revenue of 1.58 trillion won. This performance demonstrates a strong sequential rebound, with sales rising 7 percent from the prior quarter and operating margins impressively recovering to 6.8 percent from a negative 4.9 percent. However, when compared to the same period last year, revenue experienced a 7.1 percent decline, and operating profit decreased by 24.3 percent.
“The intensive restructuring of our domestic distribution channels, particularly focusing on duty-free operations since last year, is gradually yielding positive results,” a company official stated. They further highlighted product differentiation and strategic expansion into global and digital markets as critical pathways for LG H&H’s sustained growth and future profitability.
Overseas sales for LG H&H saw a modest 0.9 percent year-on-year increase, predominantly powered by an impressive 35 percent surge in North American sales. This strong international performance in the North American market effectively mitigated declines of 14.4 percent in China and 13 percent in Japan, underscoring the importance of diversified global market strategies.
The beauty division, recognized as LG H&H’s key earnings driver, posted revenues of 771.1 billion won and an operating profit of 38.6 billion won. While these figures represent a year-on-year decrease of 12.3 percent and 43.2 percent respectively, primarily due to increased marketing spend and strategic streamlining of offline retail stores, brands such as Dr. Groot and Euthymol continued to gain significant traction abroad, indicating strong potential in global beauty markets.
In other segments, the home care business faced challenges from weaker offline consumer demand. Similarly, the refreshment segment, which encompasses LG H&H’s Coca-Cola bottling operations, also reported softer sales and profit performance. Looking forward, the company anticipates that major global sporting events, including the upcoming FIFA World Cup, will provide a substantial boost to beverage demand through targeted marketing campaigns, positively impacting the refreshment sector’s outlook.
