L’Occitane H1: Hong Kong, Australia, and Malaysia lead APAC growth as China continues to slump
In the first half, APAC grew slightly by 1.9% at constant rates and 7.8% at reported rates to EUR370.3m (USD368.7m) and contributed to 6% of the company’s growth.
The French cosmetics company said overall the second quarter (Q2) of its 2023 financial year performed slightly better in the APAC region, with most markets posting double-digit growth.
The region was led by Hong Kong, Australia, and Malaysia. Hong Kong in particular posted double-digit growth in Q2 thanks to its travel retail and cross-border online businesses.
The improvements seen in APAC helped to offset the mid-teens decline in China, which has been affected by COVID-19 lockdowns.
This was a second consecutive quarter of double-digit declines for China, despite the initial reports of a ‘strong’ rebound in June this year.
The APAC region as a whole accounted for 41.1% of overall H1 sales. China is the firm’s largest market in APAC, accounting for 13%.
China had been a constant top performer for the company, surpassing all regions to become its largest market in 2021 despite the pandemic.
Despite the waning of the Chinese market, the group highlighted its optimism, noting that the decline in Q2 narrowed in comparison to Q1. In August, the company had said China recorded a decrease in the “high-teens” for Q1.
On the flip side, the company recorded stellar growth in the Americas, with performance up 59.8% at constant rates and 84.5% at reported rates to EUR281m (USD279.8m) in the first half. This was attributed to the accelerated growth in Sol de Janeiro and ELEMIS.
With these results, the US managed to outstrip China to become L’Occitane’s biggest market overall, accounting for 25.7% of the overall sales in FY2023 H1.
Furthermore, the Europe, Middle East and Africa (EMEA) region saw a rebound in FY2023 H1, growing 8.2% at constant rates and 8.8% at reported rates to EUR249.2m (USD248.1m) in part due to travel retail sales.
L’Occitane noted that excluding Russia, which it exited in May, the growth was 15.9% at constant rates.
Overall, the firm grew by 16.1% at constant rates and24.2% at reported rates in the first half, achieving sales of EUR900.5m (USD896.7m)
“Despite a worsening of the global macroeconomic environment in FY2023 Q2, including persistent inflation, increasing interest rates and muted consumer sentiment in some markets, it is pleasing to see a further acceleration in top-line growth, both on an actual and like-for-like basis. This has strengthened our optimism about reaching our FY2023 targets,” said André Hoffmann, vice-chairman and CEO of L’Occitane.
“We have a proven track record of resilience in the face of various headwinds. Our diverse reach, both in terms of brands and geography, will continue to see us through the months ahead, particularly in anticipation of the holiday season."