LG H&H records best-ever result of first quarter amid COVID-19 pandemic
By Kim Jae-heun
LG Household & Health Care CEO Cha Suk-yong
LG Household & Health Care (LG H&H) saw its best-ever performance in the first quarter this year amid concerns over an earnings shortfall it could face due to the COVID-19 pandemic that has affected its rivals including AmorePacific.
The company recorded a 333.7 billion won ($269.7 million) operating profit between January and March, up 3.6 percent from the same period last year. Sales also increased 1.2 percent to 1.89 trillion won, and its net profit was 234.2 billion won, up 3.7 percent from 2019
The unexpected results came from soaring sales in hygiene products for home and personal care.
“We saw sharp increase in demand for hygiene products due to the COVID-19 pandemic that has led to social distancing nationwide,” an LG H&H official said. “Popular items included hand sanitizer gel, wet tissues, soaps and throwaway dishcloths.”
The coronavirus did affect sales of many of LG H&H's beauty products except its luxury Sum37 and O Hui brands. Sales of the popular LosecSumma and The First soared 13 percent and 52 percent, respectively. The firm's dermatology cosmetics brand CNP also put up a good defense against tanking consumer confidence with a 13 percent increase in sales.
LG H&H's beverage sector did well too.
Many expected sales of the firm's beverage division to decline owing to a plunge in moviegoer numbers at local multiplex cinemas.
However, LG H&H managed to increase sales online ― through beverage orders on e-commerce platforms and drinks accompanying food deliveries.
“COVID-19 has affected our sales at movie theaters and restaurant franchises but we improved our performance online,” another LG H&G official said.
LG H&H CEO Cha Suk-yong is in the spotlight for the company's good performance.
Cha prepared the firm to reduce any effect of the pandemic by focusing on the sales of hygiene products. He also ordered the beverage division to concentrate on expansion in the e-commerce sector to meet possible soaring online demand.
LG H&H's beverage unit recorded a 9 percent increase in growth compared to last year with its steady-selling Monster Energy, Coca Cola and Seagram's.