Bare Escentuals ends year with high sales and profit growth

By Guy Montague-Jones

- Last updated on GMT

Related tags Percent Profit growth Generally accepted accounting principles Revenue Bare escentuals

Bare Escentuals has enjoyed another year of fast growth with sales
increasing by over a quarter and net profits rising by over three

Its mineral make-up products have proved popular with consumers, leading big name brands and private labels to join them in the fast-growing market niche. High sales and profit growth ​ Net sales for the 12 months ending December 31 increased by nearly 30 percent to $511m while sales for the last quarter of the year rose 31 percent to $145m. The strong top line fed down into high profit growth over the course of the year as operating income increased 21.7 percent to $168.9m and net income rose 75 percent to $88m Meanwhile, operating margins fell 2.1 percentage points to 33.1 percent due to higher selling, general and administration costs and depreciation and amortization expenses. Earlier in the year experts had cast doubts over the wisdom of relying too heavily on infomercials as a primary retail channel after the company had issued a profits warning over its sales in both June and August. Since then the San Francisco-based company has increased its focus on other channels opening its own boutiques which contributed $85.6m to its full year sales - an increase of 53 percent on the previous year. Its sales to premium wholesalers also increased significantly from $109.7m to $163.8m while total sales through the wholesale channel increased 43 percent to $299m. Looking forward ​ Looking to the future Bare Escentuals expects to remain on a high growth path despite increased competition from major cosmetics brands. For the coming year the company expects sales to grow between 20 and 25 percent compared to 2007. It has already acquired a UK distributor last year and will be looking to develop its foothold in Europe and other foreign markets. "We intend to build upon this momentum in 2008 by expanding our product offering and by increasing access to Bare Escentuals products both here and abroad,"​ said CEO Leslie Blodgett.

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