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Oriflame increases 2008 outlook

By Katie Bird , 08-Apr-2008

Sweden-based Oriflame has increased its outlook for 2008 on the back of positive preliminary results from the year's first quarter.

The direct selling cosmetics company has cited good performance in all markets and product sectors, and positive effects of the timing of catalogue releases, as reasons behind the results.

 

 

 

Sales well above expectations

 

 

Group sales for the first quarter of the year were well above expectations and sales growth will be approximately 21 per cent in Euros and 26 per cent in local currency, according to the company.

 

 

 

The unexpected results have led the company to increase sales outlook for the year which is now forecast to be well above 10 per cent in local currency.

 

 

 

In addition, operating margin is expected to improve on previous estimates.

 

 

 

Successful recruitment and product launches

 

 

Recruitment campaigns have proved successful throughout the quarter leading to more sales representatives and higher sales, according to the company.

 

 

 

In addition, a number of product launches meant that catalogue offerings were particularly strong, further boosting sales in the quarter.

 

 

 

In terms of geographical detail, investor relations manager for the company Patrik Linzenbold told CosmeticsDesign.com that although all markets performed well Central and Eastern Europe was particularly important for the company.

 

 

 

Linzenbold explained that the results had been positively impacted by the timing of the catalogue releases and the early Easter holiday.

 

 

 

In Central and Eastern Europe catalogues are released on a Monday every three weeks and the best selling days are the first few days of the catalogue, he explained.

 

 

 

The last day of the first quarter of 2008 was a Monday, a good selling day, boosting sales in comparison to the same period last year.

 

 

 

Furthermore, the Easter holiday period fell earlier than last year and the quarter benefited from the increased sales associated with the holiday.

 

 

 

Asked whether this effect was a large one, Lazenbold said it accounted for only a couple of percentage points.

 

 

 

The company's full quarter results will be released on 24 April.