Despite China’s retaliation against the U.S. Terminal High Altitude Area Defense (THAAD) missile system, LG Household & Health Care Ltd. made a record operating profit in 2017.
The retailer of cosmetics and household products announced on January 23 that it posted 6.27 trillion won (US$5.84 billion) in revenue and 930.3 billion won (US$867.01 million) in operating profit last year, up 2.9 percent and 5.6 percent, respectively, from a year earlier. Both figures reached a record high in 2017 after it had increased for 13 years in a row from 2005.
When the current trend continues, LG Household & Health Care is expected to surpass 1 trillion won (US$931.97 million in operating profit alone this year, according to industry sources. An official from the company said, “For all difficulties, such as the rapid drop in the number of tourists and concerns over chemical products, we withstood external shocks with our well-proportioned business portfolio consisting of cosmetics, household products and beverages. Based on unshakable seismic design, we showed a stable growth in revenues, operating profits and net profits.”
In particular, premium cosmetic brands like Whoo and Su:m37 played a vital role in driving the company’s performance. Whoo, a cosmetics brand based on traditional Korean medicine, posted 1.4 trillion won (US$1.31 billion) in sales last year, exceeding 1 trillion won (US$932.75 million) for a second successive year since 2016. The cosmetics’ sales in China also grew 34 percent compared to a year ago. In addition, the household goods and beverage divisions boosted their market shares by strengthening the stability of products, improving the quality and releasing various new products.
Meanwhile, LG Household & Health Care is highly likely to outperform AmorePacific Group in terms of sales for the first time in three years. AmorePacific’s cumulative sales and operating profits amounted to 3.98 trillion won (US$3.72 billion) and 519.5 billion won (US$484.74 million), respectively, as of the third quarter last year. AmorePacific Group surpassed LG Household & Health Care in terms of sales in 2014 and widened the gap to 600 billion won (US$559.96 million) in 2016.