L’Occitane posts strong sales growth in the first half

L’Occitane International S.A. in its unaudited quarterly update for the period ended September 30, 2022 said that despite ongoing headwinds in certain key markets, the group continued to build on the positive momentum achieved in the first quarter.

In the six months period, the company’s net sales amounted to 900.5 million euros, growth of 24.2 percent at reported rates and 16.1 percent at constant rates. On a like-for-like basis, sales growth was 5.9 percent.

Further, sales growth in the second quarter accelerated to 24.9 percent at reported rates or 16.2 percent at constant rates, driven by the group’s new brands, rebound in travel retail and distribution and foreign currency exchange tailwinds. Like-for-like growth in Q2 was 6.7 percent.

Commenting on the company’s trading update, André Hoffmann, vice-chairman & CEO of L’Occitane, said: “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.”

L’Occitane’s key brands post sales growth in H1

L’Occitane’s brands Sol de Janeiro, Elemis and L’occitane en Provence contributed strongly to the overall sales growth.

L’Occitane en Provence grew 9.4 percent at reported rates and 3.4 percent at constant rates. In the second quarter, the company added that despite the challenging market situation in China and the divestiture of its Russia business, the brand maintained growth of 1.3 percent. Excluding Russia, the growth was 4.2 percent.

Elemis reported 21.1 percent growth in the first half of 13.1 percent at constant rates, mainly contributed by strong growth in the US and further international rollouts. Sol de Janeiro ended the first half with 94.6 million euros in sales, with more than 65 percent growth in local currency as compared to the same period last year.

Other brands together posted a growth of 12.7 percent at reported rates or 4.9 percent at constant rates.

L’Occitane’s performance across geographies

In terms of regional performance, APAC grew 7.8 percent at reported rates and 1.9 percent at constant rates in the first half, with slightly better performance in the second quarter. Most markets posted double-digit growth, led by Hong Kong, Australia and Malaysia. Yet, growth in the region was partly offset by the mid-teens decline at constant rates in China.

The company further said that Americas grew 84.5 percent at reported rates or 59.8 percent at constant rates, with accelerated growth in Sol de Janeiro and Elemis. L’occitane en Provence also posted decent growth. The US is now the group’s largest market in which it operates six brands, accounting for 25.7 percent of the overall sales in H1.

EMEA saw a rebound, growing 8.2 percent at constant rates, with strong contributions from travel retail and distribution sales in the region. Excluding Russia, the growth was 15.9 percent at constant rates.

Among retail channels, wholesale & others grew 50.9 percent at constant rates, retail grew 4.4 percent at constant rates despite trading with 121 fewer stores. The total number of company-owned retail stores was 1,380 as at September 30, 2022, representing 121 net closings year to date, of which 110 closings were in Russia.

Online channels returned to growth in the second quarter, leading to 2.2 percent growth at constant rates in H1. The group’s online channels mix remained stable at 29.4 percent of total sales.