Beauty market

L’Occitane thrives despite ‘turbulent environment’ and exit from Russia

The L’Occitane Group has survived the bankruptcy of its American division, a “turbulent macroeconomic environment” and the exit of its Russian activities to post a record annual net profit.

The French cosmetics group, listed in Hong Kong and making more than 40% of its global sales in Asia, says its net sales amounted to $1.9 billion for the year to March 31, an increase of 15.8%. Net income of $256 million increased 57.5% year-on-year and the company’s operating profit margin increased 3.3 points to a record 17.4%.

Chairman Reinold Geiger said the results demonstrate the resilience of the group’s brands and teams, as well as its ability to withstand and overcome market turbulence.

“The group’s commitment to building trust, sustainable growth and profitability has continued to strengthen L’Occitane en Provence’s position in the global high-end beauty market.

While L’Occitane’s eponymous brand accounted for 76.8% of total sales, the company’s new Elemis brand recorded growth of 37.4%, increasing its share of group sales by 2.3 points in one year. year only, at 12.5%.

“Elemis [is] a key contributor to improving the group’s operating profitability through a highly successful digital-focused global expansion strategy,” Geiger said in a stock filing.

By region, L’Occitane’s sales growth was driven by China (up 16.8%), the United States (13.5%), the United Kingdom (21.4%) and Hong Kong (24%). Growth in all other regions was 16.1%.

As Covid-19 restrictions in Europe and the Americas were gradually lifted during the year, L’Occitane saw a strong rebound in footfall through retail channels, while online channels are remained “dynamic”.

“Travel retail businesses, spas and cruise ships have also benefited from the return of local and international travellers. However, towards the end of fiscal 2022, macroeconomic conditions became challenging, with a resurgence of Covid-19 outbreaks in many key markets and the geopolitical situation in Ukraine and Russia,” he said.

The company ended the year with 3,068 outlets, up from 3,088 year-on-year.

The company said it does not expect any significant gain or loss from its withdrawal from Russia.