French cosmetics maker L’Occitane’s profit beats expectations as sales strategy pay off
- US, Russia and China were the fastest-growing markets for L’Occitane
L’Occitane International reported a 21.8 per cent growth in annual net profit on the back of strong sales, handily beating estimates.
The Hong Kong-listed French cosmetics said on Monday that profit attributed to shareholders stood at €117.6 million (US$131.88 million) for the year ended March compared to €96.5 million a year earlier. Analysts polled by Bloomberg had a consensus estimate of 14.5 per cent growth in net profit to €108.33 million.
Net sales jumped 8.7 per cent to €1.42 billion, boosted by its online channels such as e-commerce and marketplaces.
“The United States, Russia and China were the fastest-growing markets, with sales growth at constant exchange rates of 31.8 per cent, 12.2 per cent and 12.1 per cent, respectively,” Thomas Levilion, chief financial officer of L’Occitane, said during a press conference.
The company in January spent US$900 million to acquire premium British skincare brand Elemis to broaden its reach into new markets and expand its distribution channels. Elemis sells both directly to consumers through its websites and wholesale to various distribution channels.
The deal, which was the company’s largest takeover since its listing in 2010, has combined benefits to both firms, said Andre Hoffmann, vice-chairman of L’Occitane.
He said the synergy between L’Occitane and Elemis comes from their shared R&D resources and global network.