L’Occitane International S.A., a certified B Corp that manufactures and retails beauty and well-being products, has shared its unaudited quarterly update for the period ended 30 September 2023.
 
The group maintained solid momentum with net sales amounting to €1,072.0 million ($1,134.4 million) in the six months ended 30 September 2023 (FY2024 H1), representing growth of 18.5% at reported rates or 24.9% at constant rates, mainly driven by the outperformance of Sol de Janeiro and the steady growth of L’Occitane en Provence with the recovering trend in China.
 
In the three months ended 30 September 2023 (FY2024 Q2), net sales amounted to €569.8 million ($603 million), representing growth of 17.1% at reported rates or 25.3% at constant rates.
 
Revisit L’Occitane’s Q1 results.

Performance by Brands

In terms of performance by brands, L’Occitane en Provence performed steadily with 3.5% growth at constant rates in FY2024 H1, driven mainly by the double-digit sales growth in China. Excluding Russia, from which the Group divested in June 2022, the brand posted sales growth of 4.8% at constant rates in FY2024 H1.
 
Elemis grew at 7.6% at constant rates in FY2024 H1. In FY2024 Q2, Elemis’ overall sales in the UK and the US declined, in line with the management’s expectations as the brand continued to execute its premiumization strategy. This resulted in the brand’s 2.4% sales decline at constant rates in FY2024 Q2.
 
In the UK, Elemis’ planned reduction in investment in certain web partners is strategically driving traffic to its e-commerce channel where it delivered double-digit growth. The US was impacted by an expected shortfall in the maritime business due to a timing shift of order shipments into the second half of FY2024. Excluding the maritime channel, the US domestic business grew by 18.3% at constant rates in FY2024 Q2. The e-commerce channel of both markets continues to grow well, with an ongoing focus on reducing discounting depth and frequency, in line with the outlined strategy.
 
Sol de Janeiro continued its sales momentum with 188.8% growth at constant rates to reach €270.0 million ($285.7 million) in sales in FY2024 H1, exceeding its annual sales in FY2023. The brand saw triple-digit growth across all geographies, driven by a highly successful summer campaign and its equally sought after core products and new launches.
 
Other brands together showed healthy growth of 10.7% at constant rates for FY2024 H1. Erborian and L’Occitane au Brésil performed particularly well with 44.3% and 35.7% growth respectively at constant rates in FY2024 H1.

Regional Performance

In terms of regional performance, the Americas led the growth with 63.6% at constant rates in FY2024 H1, mainly driven by Sol de Janeiro in the US. APAC grew 9.2% at constant rates in FY2024 H1. This was mostly contributed by the strong 28.0% growth at constant rates in China, thanks to L’Occitane en Provence and the continued development of Elemis. EMEA grew 4.1% at constant rates in FY2024 H1, mainly due to Sol de Janeiro’s strong growth and encouraging results of Erborian. Excluding Russia, EMEA grew by 8.7% at constant rates.

Business Channels

In terms of channel performance, Wholesale & others led the growth with 44.9% at constant rates in FY2024 H1, with growth in wholesale chains and international distribution.
 
Online channels posted a growth of 26.9% at constant rates in FY2024 H1, mainly driven by the strong performance of Sol de Janeiro and L’Occitane en Provence’s recently launched marketplace channel in China. Retail sales maintained a steady growth of 3.7% at constant rates, mainly due to the improved conditions in China.

Comments from CEO

Mr. André Hoffmann, Vice-Chairman & Chief Executive Officer of L’Occitane, said, “We maintained our double-digit growth momentum despite the difficult market context. It is particularly pleasing to see Sol de Janeiro’s stellar growth accelerating amid the continued steady growth of our core brand. Meanwhile, we are committed to Elemis’ premiumization strategy and believe it will enhance its long-term growth potential and profitability.”
 
“We remain cautiously optimistic about our prospects for FY2024 as we head into the important holiday and gifting seasons, which will be supported by higher marketing investments in key markets and channels for our core brand and the continued development of our newer brands. This will help us weather ongoing headwinds including foreign currency fluctuations and persistent inflation in certain markets.”