Multinational beauty company the L’Occitane Group shared its financial results for its ‘FY2024 Q1’ and Gen Z favourite Sol de Janeiro was a standout star in the quarter, which ended on 30th June 2023.
Overall, the group saw net sales of €502.2m, a 20.2% increase on the previous quarter. All figures are at a constant currency rate.
Sol de Janeiro itself saw sales rise by 171% to €113m, which the company attributed to strong sales of its core product range and new launches such as its Fragrance Mists, which were released in May.
The group acquired Sol de Janeiro less than two years ago in November 2021 and has been heavily investing in the brand ever since. In early 2023, it funded significant social media and offline marketing campaigns to further create awareness. In late April, it launched it into the global retail-travel industry.
In an interview with CosmeticsDesign-Europe in May, Sol de Janeiro’s head of global travel retail said the brand had proved a sensation in the UK and Australian markets and was one of the fastest-growing body care brands in the US.
Success for ELEMIS, Erborian and Grown Alchemist
Skin care and body care brand ELEMIS also recorded double-digit growth in the quarter, with sales increasing 23.6% to €48.4m. The brand’s largest markets, the UK and the US, grew 27.9% and 19.9% respectively, both driven by solid online growth with a reduced value offering, in line with its premiumisation strategy.
L’Occitane only acquired ELEMIS in early 2019. In May this year, the brand's social media head told CosmeticsDesign-Europe it was adopting a specific marketing strategy of working with micro-influencers to increase awareness.
The L’OCCITANE en Provence brand saw sales of €290.3m, which was 4.4% growth on the last quarter. Trading in China improved for the brans, as the country continues to reopen after the COVID-19 pandemic.
K-beauty-inspired skin care brand Erborian saw growth of 51.9% and the clean-beauty, Australian-born brand Grown Alchemist was up by 53.1% for the quarter.
Performance by region
The Americas led the growth for the group with 57.5% at constant rates for the quarter, mainly driven by Sol de Janeiro sales.
APAC saw growth of 11.2%, which was mainly driven by 35.7% growth in China, thanks to the improved sales of L’OCCITANE en Provence and the continued development of ELEMIS.
EMEA returned to positive growth of 6.4% at constant rates, mainly due to ELEMIS’ strong UK sales and healthy results for Erborian. Excluding Russia, EMEA grew by 17.1%.
Performance by channel
In terms of channels, Wholesale & others led the growth with 50.6%, with dynamic growth in wholesale chains and international distribution.
Online channels saw growth of 24.4%, mainly driven by the strong performance of Sol de Janeiro.
Retail sales also saw an increase of 3.5%, thanks to China reopening for business.
The strong start to the year comes after the group reported a 23% slump for it’s FY2023 results, posted in March 2023. Sales losses were attributed to the company’s divesture of its Russian arm and resulting share losses from its partners in the country. Plus, Melvita and LimeLife also underperformed in the previous results.
"Double-digit growth led by newer brands"
Mr. André Hoffmann, Vice-Chairman & Chief Executive Officer of L’Occitane, said, “Double-digit growth is being led by our newer brands, ELEMIS and Sol de Janeiro, who jointly contributed nearly a third of our sales this quarter in line with our multi-brand strategy. At the same time, the core brand grew nicely with the improving trend in China.”
However Hoffmann also stated, “We are mindful of the lingering macroeconomic uncertainties, such as signs of a slower-than-expected recovery in China, persistent inflation in major markets and foreign currency exchange headwinds."
He shared that the group was making higher marketing investments in its key markets and channels for the core brand and would continually develop its newer brands.
According to stories published in financial publications yesterday, L’Occitane International SA’s controlling shareholder – a vehicle owned by the Chairman Reinold Geiger – is now considering a move to take the Hong Kong-listed company private and potentially relist on European bourse.
Geiger is said to currently be considering the possibility of buying out minority shareholders and exploring financing options for the potential deal.