THE WHAT? French beauty brand L’Occitane has announced a FY2020 net sales growth of 15.2 percent at reported rates and an operating profit rise of 24.2 percent to €187.3 million, despite the ongoing impact caused by COVID-19.
THE DETAILS The company reported three quarters of solid growth to January 2020, with the coronavirus pandemic then ‘significantly affecting’ its business operations due to restrictive measures, such as travel bans, lockdowns, and shop closures in some of the group’s key markets.
Indeed, the Great Virus Crisis (GVC) hit China, Hong Kong, Japan and travel retail hard in Q4, with sales of L’Occitane en Provence decreasing 12.1% during this period.
Elemis was highlighted as a boost for its operating profitability, with the brand recording €165.8 million in sales and accounting for 10.1% of total sales. L’Occitane en Provence accounted for 78.8% of the Group’s sales in FY2020, down from 87.4% in FY2019.
The UK and U.S. saw the biggest growth geographically, 163.0% and 22.3% respectively, with a strong focus on web channels and celebrity campaigns helping create a strong sales momentum in China for the first three quarters. While sales saw a decline from January through to March due to COVID-19, web sales picked up more quickly.
China ended the year with 10.5% net sales growth at constant rates while Japan Hong Kong’s net sales declined 12.6% at constant rate put down to continued social unrest and the GVC uncertainty.
THE WHY? L’Occitane most definitely has its solid first three quarters to thank for being able to weather the storm that is COVID-19, as well as, it seems, the ongoing popularity of Elemis. So, what’s next?
Reinold Geiger, Chairman and Chief Executive Officer of L’Occitane, said, “In the short-term, we will continue to take steps to better control our cost structure amid the uncertain environment. This will leave us well-placed to emerge even stronger following the pandemic. We firmly believe the inherent strength of our brands, products and web-based activities will enable us to safeguard our profitability while continuing to deliver value to our shareholders.”