The Paris-based fragrance and cosmetics company announced preliminary results showing that new sales for the first three months of the year fell to $109.2m, compared to sales ot $12.7m recorded in the corresponding period last year.
The results showed that the underlying results were also down, with sales at comparable currency rates coming in at $118.4m for the quarter.
Sales gains in US vs falling European sales
The underlying results indicated that the company was hard hit by a significant fall in sales from its mainstay European business, which was counterbalanced to a smaller degree by significant gains in sales made in the United States.
Splitting the regions up, the figures show that sales in Europe fell by 15.2% to $86.7m, compared to $102.3m in the corresponding period last year.
In the US sales increased by a healthy 16.0%, up from $19.4m to $22.5m, with gains mainly attributable to the strength of two product launches: Extraordinary by Oscar de la Renta and Icon by Dunhill.
Besides the currency translation, CEO and Chairman Jean Madar pointed out that the sales figures had also been impacted by a significant dip in sales for the Karl Lagerfeld brand, which fell from $13m in 2014 to $2.5m in 2015.
Madar explained that there was a new fragrance launch for the Karl Lagerfeld brand in the pipeline, which should help to counterbalance the decline recorded in the first quarter.
Euro depreciates by 20%
But the main impact was attributable to the decline of the Euro, which Madar flagged up in the press statement accompanying the results announcement.
“The nearly 20% depreciation of the euro versus the dollar masked many of the gains in comparable quarter sales volume,” said Madar, who went on to compare the impact on the Montblanc brand, specifically.
“Montblanc fragrances experienced a 19% sales increase in local currency, as compared to a 2% decline in dollars with Montblanc Legend and Emblem as the two main sales drivers,” he said.
Looking ahead to the full fiscal year
The company said it was sticking to full year forecasts of $470m for net sales in 2015 at comparable currency exchange rates, which represents an increase of 7% on the figure for 2014.
The company did not make any official comment about the impact on currency translations for the rest of the year, but a number of fast moving consumer goods companies have recently forecast an impact of between 5 – 8%.