LG Household & Health Care said it returned to an operating profit in the first quarter, reversing a loss in the previous quarter, as profitability improved after a restructuring of its domestic distribution channels.
In a regulatory filing on Wednesday, the company reported first-quarter operating profit of 107.8 billion won ($107.8 billion won), down 24.3% from a year earlier. Revenue fell 7.1% to 1.5766 trillion won.
Compared with the fourth quarter of last year, however, revenue rose 7%, and the operating margin swung to a profit, improving to 6.8% from minus 4.9%.
Overseas sales edged up 0.9% as a 35% jump in North America offset declines in China and Japan of 14.4% and 13.0%, respectively.
The beauty division posted revenue of 771.1 billion won and operating profit of 38.6 billion won, down 12.3% and 43.2% from a year earlier. The company said higher marketing spending for mid- to long-term growth and efforts to improve offline store efficiency weighed on profit.
It said key brands including Dr. Groot, U Smile, Dominas and VDL performed well in global markets.
The premium scalp care brand Dr. Groot established a presence on U.S. beauty retailer Sephora’s online platform in March and is set to enter Sephora’s offline stores across North America in August. The luxury cosmetics brand The Whoo won the industry-first IR52 Jang Young-sil Award for research on NAD, which it described as a key anti-aging factor.
The Home Care & Daily Beauty division reported revenue of 397.9 billion won and operating profit of 25.4 billion won, down 0.9% and 7.4% from a year earlier. The company said sales were strong in growth channels such as health-and-beauty stores and online, but weaker demand in offline markets slightly reduced revenue and profit.
The refreshment beverage division posted revenue of 407.6 billion won, down 2.2%, and operating profit of 43.8 billion won, down 6.8%.
LG H&H said it plans to use this year’s FIFA World Cup to help lift sentiment, including an event displaying an authentic Coca-Cola trophy and the launch of special Powerade packaging.
“Since last year, the intensive restructuring of domestic distribution channels, centered on duty-free, is gradually translating into results,” a company official said. “Based on differentiated product competitiveness built on R&D, we will accelerate brand innovation and continue strategic growth focused on global and digital markets.”
* This article has been translated by AI.
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