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L’Occitane announces ‘record highs’ in annual results for FY2017

By Lucy Whitehouse + , 16-Jun-2017

L’Occitane announces ‘record highs’ in annual results for FY2017

L’Occitane has released its FY2017 results, and sees its net profit up 16.2% to EUR 132.4 million, the highest since its listing, while gross margin reached a ‘historical high’ of 83.3% (up 0.5 points).

Net sales came in at EUR 1,323.3 million, an increase of 1.7% at mostly constant rates year on year. According to L’Occitane, the improvement in net sales was mostly attributable to the Group’s new stores and newly renovated stores, the good performance of its web channels and own E-commerce business, and double-digit growth in the Group’s emerging brands.

Reslience in the face of turbulence

L’Occitane International SA is a major leader in the global premium beauty market, as an ingredient-based

cosmetics and well-being products company whose natural-focussed brand image centres on its origins from Provence, France.

Its results show a resilient performance despite some market turbulence, according to Reinold Geiger, Chairman and Chief Executive Officer of L’Occitane.

Despite ongoing external challenges in many of the markets where we operate, we are extremely pleased to report our highest ever profit since our listing,” he said.

This result demonstrates that our omni-channel sales strategy and brand building efforts have really come to the fore.

Emerging brands

Part of the success story can be pinned on the Group’s ‘emerging brands’, according to the company.

“The development of the Group’s emerging brands – L’Occitane au Brésil, Melvita and Erborian – remained on  rack and contributed more to overall growth during FY2017, with some of these brands achieving double-digit or even triple-digit growth by tapping audiences and followings, especially in the Japan, France and Brazil markets.”

The company has also been investing in broadening its portfolio further, with the recent investment of USD 128 million for a 40% in LimeLight in the US.

“This result is solid proof of our commitment to deliver comforting and luxurious products to our customers, who seek offerings made from socially-conscious, high-quality, natural and sustainable ingredients,” Geiger stated.

“The result is also a strong reflection of the trust we place in our people, to whom we continue to give autonomy and the means to become strong professionals, making sure that they have a strong sense of accountability.”

Regional focus

Brazil and Japan registered the largest growth at actual rates, with sales growing 30.0% and 15.5% (due to the stronger Brazilian Real and Japanese Yen) respectively, the brand states.

Local currency sales in Brazil also grew by 18.4%, which was driven by both the L’Occitane en Provence and L’Occitane au Brésil brands.

In terms of local currency sales, China was also stand out market for the Group in FY2017, with sales growing 11.0% compared to FY2016, as a result of accelerated growth at its physical and online stores (such as its flagship on TMall) and B2B, particularly in the last quarter of FY2017.

Sales in Hong Kong continued to be negatively affected by falling numbers of inbound tourists, heavy discounting and the strong Hong Kong Dollar, while sales in France remained sluggish due to terrorism fears, the recent presidential election and poor retail sentiment.

E-commerce and wholesale sales in the United Kingdom grew as the result of well-received Christmas and holiday offerings.

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