L’Occitane International’s net earnings fall despite higher sales

L’Occitane International’s net earnings declined despite higher sales in the last fiscal year.

The beauty brand’s net profit fell 13.9 per cent to €101.8 million (US$109.3 million) while net sales rose 19.1 per cent to €2.54 billion for the fiscal year ended March 31.

By brand, L’Occitane en Provence’s net sales fell 2.3 per cent to €1.39 billion despite China delivering double-digit growth in all channels. Elemis’ net sales decreased 1.2 per cent to €253 million while Sol de Janeiro surged 157 per cent to €686.1 million.

Net sales of other segments jumped 12.3 per cent to €214.0 million.

The company noted that the cost of sales grew 26.2 per cent to €525.6 million.

Moreover, the gross profit margin slid to 79.3 per cent due to an unfavourable brand mix, unfavourable foreign currency exchange, higher obsolescence due to an increase of slow movers, and an unfavourable channel mix from higher sell-in proportion.

The Americas emerged as the company’s largest market, followed by Asia Pacific (Apac) and Europe, Middle East, and Africa (EMEA).

The company said it remains cautiously optimistic for the current fiscal year.

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