L’Occitane H1 Sales Up 19%, Driven by Sol de Janeiro and Elemis


L’Occitane International S.A., an international group that manufactures and retails beauty and well-being products, has announced its interim results for the six months ended 30 September 2023 (FY2024 H1).
 
The Group saw solid sales momentum in FY2024 H1, with net sales amounting to €1,072.0 million ($1,173.3 million), representing 19.0% growth at reported rates as compared to the reported net sales of €900.5 million ($985.6 million) in FY2023 H1.
 
Sol de Janeiro’s sales in FY2023 H1 were modified due to a reclassification of sales in the marketplace channel, hence the Group’s comparable net sales in FY2023 H1 amounted to €904.5 million ($990 million). As such, the Group recorded sales growth of 18.5% at reported rates or 24.9% at constant rates, as compared to the net sales of €904.5 million in FY2023 H1.
 
Revisit the company’s FY2024 Q1 Results.


Investment Strategy

The Group is investing proactively to secure its status as a multi-billion-euro group in the years to come. In FY2024, the Group significantly increased investments in its key priorities in line with its triple bottom-line or 3P model (for People, the Planet and Profit), mostly in marketing for core brands, but also in improving its CRM capabilities, data security and upgrading factories to become more water and energy efficient, to name a few.
 
L’Occitane en Provence received the largest portion of the marketing budget to invest in key markets, notably in China but also in other strategic markets and channels such as the US, Japan, South Korea and travel retail. This is already having a pronounced effect, with core brand sales in China growing by 22% at constant rates in the FY2024 H1 despite muted consumer confidence in the overall economy.
 
The additional investment in China focused on the key face care, body care and hair care categories, including highly impactful marketing campaigns for its bestselling Almond range, the launch of the White Lavender range and the relaunch of its iconic Immortelle Divine Cream that drove brand awareness and increased average ticket value to compensate for reduced offline traffic.


Sol de Janeiro Maintains Strong Momentum

Sol de Janeiro maintained its impressive momentum with sales growing by 188.8% at constant rates in FY2024 H1, with triple-digit growth across all geographies and a strong contribution to the Group’s profit, delivering an operating profit margin of 28.9%.
 
The brand’s performance was boosted by a major summer campaign in its home market of the U.S., where Sol de Janeiro maintained the No. 1 skincare brand ranking in Sephora North America and the overall No. 1 brand ranking at Kohl’s.
 
The brand also demonstrated its year-round appeal with its limited edition Fall fragrance mist, After Hours. It is now the Group’s second-largest brand, making up 25.2% of its net sales.
 
Most recently, Sol de Janeiro launched travel-friendly sets of its popular products.


Elemis Growth Remains Solid

Elemis grew a solid 7.6% at constant rates in FY2024 H1 as it continued to implement its premiumization strategy, under which it reduced investments with certain web partners in the UK to drive traffic to its own website, where it delivered double-digit growth while continuing to reduce discounting depth and frequency. Elemis’s e-commerce channel in the U.S. also continued to grow well, in line with the same strategy.
 
In China, Elemis saw sales growth of over 200% as it accelerated marketing investments on social media channels, highlighting its global bestsellers such as the Pro-Collagen Cleansing Balm. KOL livestreaming via Douyin also had a powerful impact on the brand’s sales growth.


CEO is ‘Cautiously Optimistic’

Mr. André Hoffmann, Vice-Chairman and Chief Executive Officer of L’Occitane, said, “We are cautiously optimistic about our prospects in the second half of FY2024 as we head into the holiday and gifting seasons. Despite its near-term impact on our margins, our expanded marketing investments are already bearing fruit in boosting brand awareness and engagement, and remain vital in supporting our ability to outperform the overall premium beauty market in China and other key markets.”
 
“Through our portfolio of strong and unique premium beauty brands and our commitment to investing for the long-term, we are well-positioned to continue driving sustainable growth and profitability for our shareholders and stakeholders.”



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