L’OCCITANE REPORTS 8 PERCENT GROWTH FOR Q3 SALES; FEELS HIT OF CHINA’S COVID-19 EXIT STRATEGY

THE WHAT? L’Occitane has reported a Q3 sales growth of 8 percent for the period ending 31 December, 2022, with the net sales growing 16.5 percent at reported rates for the nine months’ period. 

THE DETAILS The company’s unaudited quarterly update highlighted that on a like-for-like basis, i.e. excluding Russia due to the Group’s divestiture in June 2022, the newly consolidated brands Sol de Janeiro and Grown Alchemist, the impact from the deconsolidation of the US subsidiary last year and at constant rates, sales growth was 2.3 percent.

Per brand, L’Occitane en Provence reported a sales decline of 0.9 percent and 5.5 percent in FY2023 9M and FY2023 Q3, Elemis posted 11.3 percent growth at reported rates or 5.3 percent growth at constant rates in FY2023 9M, a slowdown from the double-digit growth in the first half of FY2023.

Sol de Janeiro accelerated its strong sales momentum in FY2023 Q3 with a record quarter of sales of €64.2 million and ending FY2023 9M with sales of €158.8 million.

Regionally, the Americas led growth with 75.1 percent at reported rates or 53.7 percent at constant rates in FY2023 9M, APAC posted growth of 2.7 percent at reported rates and a decline of 0.6 percent at constant rates in FY2023 9M, while EMEA saw a slight sales decline of 0.3 percent at constant rates in FY2023 9M.

THE WHY? The Q3 sales growth was put down to being ‘a result of challenging macroeconomic conditions in certain key markets’, with China being the main culprit. 

André Hoffmann, Vice-Chairman & Chief Executive Officer of L’Occitane, said, “Like many brand operators with a strong retail footprint, we are feeling the effect of China’s exit from COVID-19 restrictions and more cautious sentiment in other markets around the world.”