adminBy Kwanwoo Jun
LG H&H’s shares slumped Friday after its third-quarter earnings miss and amid a downbeat 2023 outlook.
Shares of the South Korean beauty-product company fell as much as 18% to 322,000 Korean won ($237.89) in early trade, their steepest daily percentage decline since listing in 2001, according to FactSet. The benchmark Kospi was last up 0.7%.
The selloff came after LG H&H on Thursday posted below-consensus results for the July-September quarter. Net profit dropped 28% from a year earlier to KRW91.30 billion, below the FactSet-compiled consensus forecast of KRW95.61 billion.
Cosmetics sales declined sharply at duty free shops and in China, weighing on quarterly earnings. That prompted the company to cut its full-year target.
LG H&H now expects 2023 operating profit to reach KRW470 billion, down 36% from its earlier target.
The lowered guidance suggests a 70% downside risk to the market consensus forecast for LG H&H’s fourth-quarter operating profit, Citigroup analyst Paul Hwang said in a research note.
Hwang said he sees no immediate catalyst to drive a recovery in the share price, and expects the company to deliver an even bigger earnings miss in the final quarter.
Citi cut its target price for the stock by 11% to KRW400,000 and maintained a neutral rating.
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