Oriflame results hit by currency translation, negating sales gains

By Simon Pitman

- Last updated on GMT

Related tags United states dollar Currency

Oriflame sales dropped during its third quarter, with a double digit gain in local currency sales being negated by unfavourable currency translation.

The company said that sales dropped by 7 per cent, from €297.3 in the same period last year, to reach €277.3m, while in local currency terms sales increased by 10 per cent.

The gains in local currencies were driven by strong gains in the Asia, where sales were up 27 per cent to €26.2m, CIS & Baltics, up 16 per cent to €145.9m and Latin America, up 4 per cent to €15.3m.

EMEA regions sales fall

The exception to the growth was the EMEA region, which covers the main western European markets together with Morocco and Turkey. Here sales during the third quarter fell 7 per cent to €85.5m.

The direct sales company said that the increase in sales on a local currency basis was partly driven by a 16 per cent increase in its sales force, which numbered 3.1m consultants at the end of the third quarter.

The company did however point out that the increase in staff was offset by a 4 per cent decrease in productivity and a lower level of third party sales.

Retail prices up and product mix positive

Average retail prices increased by 4 per cent during the period, while the product mix was said to be positive by 3 per cent, mainly due to a series of new launches within the accessories and fragrance division.

For the full nine month period group sales increased by 1 per cent, from €927.9m to €934.1m, a figure that represented a 16 per cent increase in local currency terms.

Looking ahead, the company reaffirmed its goals to attain local currency sales growth in excess of 10 per cent and said that it was well on course to achieve that goal during the current financial year.

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