L'Occitane International, the French skincare retailer, said net profit dropped 3 per cent despite growing sales for the six months to September 30. L'Occitane International's shares rose 4.05 per cent to close at HK$15.42 before the company released the interim results last night. Net profit fell to Euro28.5 million (HK$296 million) for the six months through September, from Euro29.8 million a year earlier. The net profit margin declined 1 percentage point to 8.1 per cent. Net sales for the company increased 11.3 per cent to Euro368 million during the period, thanks to strong sales growth in Hong Kong, on the mainland and in South Korea. The company attributed the decline in profit mainly to a significant rise in distribution expenses, marketing costs and a strong euro against the US dollar. As of September 30, the high-end skincare-product seller had 1,899 shops globally, a net increase of 257 from a year ago. Of those, 967 are self-managed stores. Japan is the company's largest market, contributing nearly a quarter of total sales. The United States, France, Hong Kong and Luxembourg are also major markets, each amounting to about 10 per cent of total sales. The mainland was the fastest-growing market during the period, with sales rising 56.4 per cent to Euro19.1 million. Andre Hoffmann, executive director of L'Occitane, said a possible slowdown in the mainland's economy might affect the retail sector next year. But the company will not slow its rate of expansion across the border and plans to increase the total number of mainland shops to 100 by the end of next March. Hoffmann was optimistic about sales for the Christmas holiday season next month. The company will continue to explore strategic acquisition opportunities, especially in Asia and emerging markets. L'Occitane said it recommended no dividend for the period in order to 'maintain a strong balance sheet for future growth'.