Profit dip but sales boost in Asia keeps L’Occitane happy

By Andrew McDougall

- Last updated on GMT

Related tags Economy of the people's republic of china Hong kong

Profit dip but sales boost in Asia keeps L’Occitane happy
French cosmetics firm L’Occitane saw its fiscal H1 profit take a dip despite posting net sales growth driven by the market in Asia and a turnaround in the US.

Profit for the period, ended 30 September 2011, came in at €29.8m, 1.3 per cent down on the previous year figure of €30.2m.

However, despite what the ingredients company call ‘difficult market conditions’, L’Occitane stated that it was happy with the sales growth particularly as it develops markets around the world.

Reinold Geiger, CEO of L’Occitane, said, that “During the period, we continued to implement our strategic plan in boosting sales growth and strengthening our presence globally through accelerated store openings as well as putting in place investments for future growth and developments.”

Encouraging figures

“As a result, we delivered solid top-line growth with particularly successful performance in Asia, notably in Hong Kong, Korea and China, and have seen a very encouraging turnaround in the US.”

Net sales for the half year period increased 11.3 per cent to €368.5m as compared to the prior year period, which the French firm explains reflects net sales growth in most business segments and geographic areas.

According to figures, sales in Japan, Hong Kong, China, Brazil, Russia, the USA and Other Countries were the driving factors of net sales growth in the six month period.

In terms of geographic areas, excluding foreign currency translation effects, China achieved 56.4 per cent in net sales growth as the fastest growing market among all countries. Hong Kong, Brazil and Russia also performed well, reaching 30.8, 34.8 and 23.8 per cent, respectively.

A French first

Back in May 2010, L’Occitane became the first French company to list in Hong Kong in the hope that it would tap into China’s consumption growth.

The natural and organic ingredient-based company says it is continuing this focus along with the hope of developing the potential of the BRIC markets as well as Korea.

“We will continue to execute our strategy as planned, and focus on the upcoming holiday season to achieve successful sales during this key period. Investments in our structures and operations and stores network will remain visible in the second half, however we will take full advantage of the resulting positive effects and of the seasonally higher sales,”​ added Geiger.

“The combination of our major marketing operational initiatives will set the basis for future growth, which in turn, will generate better returns for our shareholders,”​ he concluded.

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