LG Household & Health Care Q3 operating profit rises 52% to 70.4 billion won; beauty operating loss narrows

[Financial News] LG Household & Health Care continued to improve profitability, backed by overseas performance, including in North America. Revenue remained at a level similar to last year despite the sale of Avon, a U.S. cosmetics brand.
LG Household & Health Care disclosed on the 3rd that its consolidated operating profit for the third quarter was provisionally tallied at 70.4 billion won, up 52.4% from the same period a year earlier. Revenue for the same period fell 0.2% to 1.5774 trillion won. Despite the results of its North American subsidiary, The Avon Company, being excluded from September following its sale, third-quarter revenue remained at the year-earlier level.
Overseas revenue fell 12.5% year on year to 432.3 billion won. Revenue in North America and China came to 135.5 billion won and 115.1 billion won, down 12.5% and 21.1%, respectively. North American revenue grew 5% excluding the Avon sale. Growth continued at Dr. Groot, the company's leading North American brand, while sales in China fell following a restructuring of its online business.
The beauty division posted revenue of 660.8 billion won, down 0.3% from the same period a year earlier, and an operating loss of 10.9 billion won, narrowing its loss from last year. The history of Whoo returned to growth on higher duty-free sales, while major brands including Dr. Groot, Dominas, Euthymol and VDL also posted strong growth. Efforts to improve store efficiency at department stores and discount stores also contributed to improved profitability.
The household goods (HDB) division recorded revenue of 419.2 billion won, up 3.8%, and operating profit of 31 billion won, down 3.1%. Profitability declined as the company increased marketing investment amid higher sales through major channels. FiJi Moraxella, a laundry detergent specialized in removing musty odors, ranked No. 1 in Coupang's laundry detergent category for three consecutive months. 46cm (body odor care) and HomeStar (home products) also drove results.
The beverage division (Refreshment) recorded revenue of 497.4 billion won and operating profit of 50.3 billion won, down 3.1% and 19.9%, respectively, from the same period a year earlier. Falling beverage demand, cost pressures and promotional competition weighed on results.
Meanwhile, LG Household & Health Care held a board meeting that day and resolved to buy an additional 25% stake in VivaWave, the subsidiary that operates the color cosmetics brand hince. The purchase is under a call option agreed upon when the company was acquired in 2023, and will give LG Household & Health Care full ownership of VivaWave.
An LG Household & Health Care representative said, "We are focused on developing strategic brands based on differentiated product competitiveness grounded in scientific research, and expanding new growth opportunities in global markets." The representative added, "There may be short-term fluctuations in performance as we reorganize our business portfolio, but we will build a foundation for medium- and long-term growth through continued product innovation and stronger business competitiveness."

[email protected] Kang Myeong-yeon Reporter