Corporate Logo(source: lghnh.com)
NH Investment & Securities stated on July 3 that LG Household & Health Care (051900) is expected to underperform market expectations for the second quarter, citing a decline in profitability within its cosmetics division. The firm maintained its target price at 340,000 won and reiterated a “Neutral” investment rating.
In the report, NH estimated that LG Household & Health Care’s consolidated revenue for the second quarter would reach 1.7234 trillion won, with operating profit forecasted at 130 billion won. These figures represent year-on-year declines of 2% and 18%, respectively.
The cosmetics division is projected to generate 714.1 billion won in revenue and 46.8 billion won in operating profit, marking decreases of 6% and 36% compared to the same period last year.
Analyst Ji-yoon Jung explained, “Profitability in the cosmetics segment is expected to decline due to the contraction of traditional channels such as duty-free and door-to-door sales, coupled with increased global marketing investments.” She added, “This contraction in legacy channels is likely to continue going forward.”
In contrast, the household goods segment is forecasted to see moderate growth, with revenue estimated at 540.3 billion won, up 4% year-on-year, and operating profit of 35.7 billion won, up 5%. Jung noted, “Premium product lines such as Dr. Groot in North America and Usemol in Japan are contributing to global revenue growth.”
However, the beverage segment is projected to post revenue of 469 billion won and operating profit of 47.6 billion won. “Despite the peak season, sales have declined due to unfavorable weather and subdued consumer spending, which continue to pressure profit margins,” Jung observed.
Looking ahead to the second half of the year, NH expects a recovery in performance driven by new business initiatives and expanded global sales. “The domestic health & beauty (H&B) segment, online channels, and the Hintz brand are all experiencing high growth,” said Jung. She added that the company plans to expand its presence in the beauty device market through the acquisition of LG Electronics’ Pra.L business.
In global markets, LG H&H’s revenue in China is projected to reach 162.1 billion won, while North America is expected to continue delivering double-digit growth, particularly through Amazon. Jung concluded, “The company is likely to pursue a strategy centered on new businesses and global revenue expansion.”
*[KOSPI] LG Household & Health Care(051900) focuses on manufacturing and selling cosmetics, household goods, and beverages, and its representative brands include 'The History of Whoo', 'SU:M37˚', 'O HUI', 'belif', and 'CNP'. The market capitalization is 5.06 trillion won (as of June 2, 2025, closing price).
Corporate Logo(source: lghnh.com)
NH Investment & Securities stated on July 3 that LG Household & Health Care (051900) is expected to underperform market expectations for the second quarter, citing a decline in profitability within its cosmetics division. The firm maintained its target price at 340,000 won and reiterated a “Neutral” investment rating.
In the report, NH estimated that LG Household & Health Care’s consolidated revenue for the second quarter would reach 1.7234 trillion won, with operating profit forecasted at 130 billion won. These figures represent year-on-year declines of 2% and 18%, respectively.
The cosmetics division is projected to generate 714.1 billion won in revenue and 46.8 billion won in operating profit, marking decreases of 6% and 36% compared to the same period last year.
Analyst Ji-yoon Jung explained, “Profitability in the cosmetics segment is expected to decline due to the contraction of traditional channels such as duty-free and door-to-door sales, coupled with increased global marketing investments.” She added, “This contraction in legacy channels is likely to continue going forward.”
In contrast, the household goods segment is forecasted to see moderate growth, with revenue estimated at 540.3 billion won, up 4% year-on-year, and operating profit of 35.7 billion won, up 5%. Jung noted, “Premium product lines such as Dr. Groot in North America and Usemol in Japan are contributing to global revenue growth.”
However, the beverage segment is projected to post revenue of 469 billion won and operating profit of 47.6 billion won. “Despite the peak season, sales have declined due to unfavorable weather and subdued consumer spending, which continue to pressure profit margins,” Jung observed.
Looking ahead to the second half of the year, NH expects a recovery in performance driven by new business initiatives and expanded global sales. “The domestic health & beauty (H&B) segment, online channels, and the Hintz brand are all experiencing high growth,” said Jung. She added that the company plans to expand its presence in the beauty device market through the acquisition of LG Electronics’ Pra.L business.
In global markets, LG H&H’s revenue in China is projected to reach 162.1 billion won, while North America is expected to continue delivering double-digit growth, particularly through Amazon. Jung concluded, “The company is likely to pursue a strategy centered on new businesses and global revenue expansion.”
*[KOSPI] LG Household & Health Care(051900) focuses on manufacturing and selling cosmetics, household goods, and beverages, and its representative brands include 'The History of Whoo', 'SU:M37˚', 'O HUI', 'belif', and 'CNP'. The market capitalization is 5.06 trillion won (as of June 2, 2025, closing price).