Bare Escentuals says it will fulfill financial goals

By Simon Pitman

- Last updated on GMT

Related tags: Company, Cosmetics, Generally accepted accounting principles

Prestige naturals cosmetic player Bare Escentuals says it is on
course to achieve its financial goals for 2007, confirming its
status as one of the fastest growing companies in this segment of
the US market.

The company said that its performance in the first quarter, and early figures for the second quarter, indicated that all sales are set to grow by 27 - 30 percent during the full year, on the back of strong consumer demand for its products. The company added that on a retail channel basis, year-over-year sales growth for the second quarter of fiscal 2007 is expected to be in line with first quarter growth rates, when net sales came in at $115.6m, compared to $89.9m, a rise of 28.5 percent. However, the company reported that there is expected to be one exception during the second quarter's performance, compared to the previous year, and that will be the Infomercial channel which is expected to be flat relative to the prior year. However, on the whole the company said it is anticipating modest growth in the infomercial channel for the fiscal year 2007 as a whole. The company has been tapping into the huge increase in demand for natural-based personal care products, reflected by its fourth quarter performance, also its first as a publicly traded company, when it reported a 39 per cent increase in sales, backed up by big rises in both net and operating income. The company said net sales for that quarter hit $110.5m, compared to total sales of $70.3m recorded in the same period last year. Bare Escentuals listed itself on the Nasdaq Stock Market back in September 2006, and share prices have grown steadily, currently hovering around the $39 mark. For the full year net sales were $394.5m, representing an increase of 53 per cent on the figures for 2005. Net income was $50.2m, more than doubling the $23.9m achieved in 2005. In line with the big rise in operating income, the figures for 2006 were up 79 percent compared to 2005, to reach $138.8m. Until now the company's efforts have been concentrated on the North American market, but that is about to change. It recently purchased a UK distributor, a move that should give the company access to the European market. The deal saw Bare Escentuals buy up UK-based Cosmeceuticals Limited, a company that currently distributes its mineral-based cosmetic and personal care products throughout Europe. Although the focus will initially be on the fast-growing UK market for natural cosmetics, Cosmetceuticals Limited has a distribution network throughout Europe, which should give the company a strong foundation for further expansion in the future.

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