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The Body Shop : still on the right track

20-Jun-2005

UK-based international cosmetics and toiletry player Body Shop has released projected sales figures at its AGM indicating that the company's recovery is getting into full swing, reports Simon Pitman.

The company also said that sales for its first quarter were well up on the comparable quarter, giving it further good reason for optimism.

"In the first quarter of the current years, total retail sales were up by 8 per cent, with comparable store sales up by 5 per cent," said Peter Saunders, Body Shop CEO. "These positive trends are in line with those seen in the first eight weeks of the year, as reported with the preliminary results announcement. Sales through the Body Shop At Home grew by 12 per in the first quarter, and group turnover was up 23 per cent on the same period last year."

 

The slowest market performance was in the Americas, where total retail sales were up by 5 per cent, but comparable store sales were down 1 per cent. Last year the company launched internet sales in the US market, with significant success, so the figures are thought to be indicative of the continued success impacting store sales.

 

However, the company did add that sales in the US had generally been flat, while Canadian sales had dropped by 3 per cent, reflecting a fiercely competitive retail environment.

 

Asia Pacific continued to experience the strongest growth rates, with retail sales up 12 per cent and comparable store sales up 8 per cent. Breaking this figure down, the fastest growth was seen in Southeast Asia and Taiwan, where comparable store sales increased 18 per cent and 15 per cent respectively.

 

In the European, Middle East and African region both total retail sales and comparable store sales grew by 6 per cent, with highlights including the Middle East and the Nordic countries, where comparable store sales grew by 12 per cent and 13 per cent respectively.

 

France, Germany and Spain also recorded improved trends with each country experiencing a growth in comparable store sales of 15 per cent, 13 per cent and 6 per cent respectively. The performance in Germany is particularly strong considering the weak retail environment there.

 

A significant decline of comparable store sales in Italy appears to have been slowed down, with the figure falling 5 per cent, compared to 8 per cent in the previous quarter.

 

In the all-important UK market, the performance continues to be strong, with comparable stores sales increasing 7 per cent over the same period last year.

 

Saunders also reported that the company's investment and implementation of the SAP Enterprise Resource Planning System has made "significant progress in recent weeks". The warehousing and financial information have now been fully integrated into the operations.

 

Looking to the performance for the rest of the year, the company said that it is still on course to see a reduction of 25 per cent in underlying operating profit due to an increased seasonal bias towards the second half of the year.

 

"For the full year, we continue to plan a 15-20 per cent growth in operating profit, with a somewhat slower growth in earnings due to an increase in the tax rate," Saunders said.

 

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