Today (January 31), LG H&H announces its financial report for the fourth quarter of 2023. It announced sales of 1.567 trillion won ($1.17 billion), reflecting a year-on-year decrease of 13.3%. The operating profit for the same period amounted to 55 billion won ($41.22 million), experiencing a significant decline of 57.6% compared to the previous year.
The company faced challenges across all its business segments, namely Beauty, HDB, and Refreshment, resulting in a decline in sales. The Beauty segment was particularly affected by reduced demand from China, which impacted its profitability. Additionally, the costs associated with the reorganization of the overseas business structure further contributed to the decline in operating profit.
For the fiscal year 2023 as a whole, LG H&H reported a decrease in sales of 5.3% year-on-year, amounting to 6.805 trillion won ($5.1 billion). The operating profit also experienced a substantial decline of 31.5% year-on-year, reaching 487 billion won ($365 million). In the Beauty business segment specifically, sales in the fourth quarter of 2023 dropped by 23.7% compared to the previous year, amounting to 664 billion won ($497.7 million). The operating profit for the same period plummeted by 90.8% to 7 billion won ($5.25 million).
The decline in Beauty sales was primarily driven by weak demand from China, while sales in domestic channels showed growth. The company witnessed a double-digit decrease in sales in China and DFS, while online and H&B sales experienced growth due to increased demand from both domestic consumers and foreign tourists. The reduced sales in China, along with the costs associated with the overseas business reorganization, negatively impacted the operating profit.
In the HDB (Home Care & Daily Beauty) business segment, sales for the fourth quarter of 2023 decreased by 4.5% year-on-year, amounting to 503 billion won ($377 million). The operating profit experienced a slight decline of 3.7% compared to the previous year, reaching 18 billion won ($13.49 million). The decline in HDB sales was attributed to softer demand in the domestic market and increased volatility in the overseas business. Notably, key brands such as ‘Physiogel’ and ‘Euthymol’ reported steady growth, while the premium line of the brand ‘Bamboo Salt,’ known as ‘Oriental Herb Medicare Line,’ achieved strong sales growth in the online channel. Despite improvements in the product mix, the operating profit slightly fell.
For the fiscal year 2023, HDB sales decreased by 1.2% year-on-year, amounting to 2.182 trillion won ($1.64 billion), while the operating profit experienced a decline of 34.0%, reaching 125 billion won ($93.69 million).
LG H&H said 2024 will strengthen the core competitiveness of the group’s business, and FY2024 will be a growth inflection point for the group by driving growth in the domestic market, building a robust China business, and expanding non-China overseas business.
