“Sol de Janeiro’s stellar growth accelerating”. L’Occitane Group’s CEO on HY financial results
For its first half of 2024 (31st March to 30th September 2023), L’Occitane International’s global group sales reached €1.073bn, up by 24.9% on a constant rates/like-for-like basis compared to the same period last year.
Meanwhile for the second quarter, sales reached €569.8m and were up by 25.3% at constant rates.
ELEMIS sales drop in Q2 due to new premiumisation strategy
Flagship brand L’OCCITANE en Provence saw sales grow by 3.5%, which the company said mainly came from double-digit sales growth in China.
Prestige brand ELEMIS also experienced growth for the first half of the year (+7.6% at constant rates), but then saw sales decline in the UK and the US markets in Q2, which the company claimed was “in line with management’s expectations as the brand continued to execute its premiumisation strategy.”
The Group said that in the UK market, ELEMIS’s planned reduction in investment in certain web partners is “strategically driving traffic to its e-commerce channel where it delivered double-digit growth.”
It also said that US sales were impacted by shipment issues in the maritime business.
However, excluding this channel, the US domestic business grew by 18.3% at constant rates in FY2024 Q2.
The e-commerce channel of both markets also continued to grow and the company said there was an “ongoing focus on reducing discounting depth and frequency” as part of its new strategy.
On the topic of ELEMIS new strategy, Vice-Chairman & CEO of L’Occitane André Hoffmann also stated that he was “committed to ELEMIS’ premiumisation strategy” and believed it would “enhance its long-term growth potential and profitability.”
Sol de Janeiro is still a Gen Z superstar
Sol de Janeiro continued its impressive sales momentum with 188.8% growth at constant rates to reach €270m in sales for the first half of the financial year, which the company said exceeded its annual sales for the whole of its 2023 financial year.
The brand saw triple-digit growth across all geographies and has continued to grab the attention of consumers in the travel-retail industry.
K Beauty-inspired Erborian and L’OCCITANE au Brésil also performed well with 44.3% and 35.7% growth respectively at constant rates for the first half of the financial year.
Performance by regions and channels
Regionally, the Americas led the growth with 63.6% at constant rates for the first half – mainly driven by Sol de Janeiro’ popularity in the US market.
Sales in APAC grew by 9.2% at constant rates for the same period, which the company said was mostly contributed by the strong (28% growth) in China, thanks to L’OCCITANE en Provence and development of ELEMIS.
For the first half, sales in EMEA grew by 4.1%. Sol de Janeiro saw strong results here too and the company noted that Erborian also showed encouraging results.
In terms of channel performance for the first half of 2024, Wholesale & others led the growth with 44.9%; Online channels posted a growth of 26.9% mainly driven by sales from Sol de Janeiro and L’OCCITANE en Provence’s recently launched marketplace channel in China.
Retail sales also kept steady growth of 3.7%, which the company said was "mainly due to the improved conditions in China."
Of the financial results, Vice-Chairman & CEO of L’Occitane, André Hoffmann, stated: “We maintained our double-digit growth momentum despite the difficult market context. It is particularly pleasing to see Sol de Janeiro’s stellar growth accelerating amid the continued steady growth of our core brand.”
He continued: “We are cautiously optimistic about our prospects for FY2024 as we head into the important holiday and gifting seasons, which will be supported by higher marketing investments in key markets and channels for our core brand and the continued development of our newer brands. This will help us weather ongoing headwinds including foreign currency fluctuations and persistent inflation in certain markets.”
