LG H&H (051900) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenue was ₩1.7136 trillion, down 1.9% year-over-year; operating profit was ₩106.1 billion, down 17.4% year-over-year.

• Net income for Q3 2024 was ₩73.5 billion, a 19.4% decrease compared to the same quarter last year.

• Operates in Beauty (cosmetics), HDB (home care & daily beauty), and Refreshment (beverages) segments, with 2023 sales split: Beauty 41%, HDB 32%, Refreshment 27%.

• Overseas sales grew 3.5% year-over-year, now accounting for 27% of total revenue, with notable growth in China and Japan.

• Nine-month cumulative revenue reached ₩5.202 trillion, down 0.7% year-over-year; operating profit was ₩415.6 billion, down 3.8%.

Financial highlights

• Q3 2024 gross profit was ₩877.1 billion, down from ₩922.3 billion year-over-year.

• Operating margin for Q3 2024 was 6.2%, down 1.2 percentage points year-over-year.

• Cumulative operating margin for the nine months was 8.0%, down 0.3 percentage points year-over-year.

• Cash and cash equivalents at Q3 2024: ₩745.9 billion.

• Debt ratio increased to 31.2% from 30.1% at year-end 2023.

Segment performance

• Beauty segment Q3 revenue fell 2.9% year-over-year to ₩650.6 billion, but operating profit rose 42.8% to ₩11.4 billion, driven by improved overseas profitability and luxury brand initiatives.

• HDB segment Q3 revenue declined 1.3% year-over-year to ₩562.6 billion; operating profit dropped 11.8% to ₩41.2 billion due to increased fixed costs despite premium brand growth.

• Refreshment segment Q3 revenue decreased 1.1% year-over-year to ₩500.4 billion; operating profit fell 27.5% to ₩53.5 billion amid weak domestic demand and rising input costs.

• Overseas sales in China grew 12.1% year-over-year in Q3, while North America declined 15.9%; Japan sales rose 10.1%.

• Beauty: Q3 2024 sales ₩2,151.2B (41.3% of total), operating profit ₩147.2B.