Footfall rebound spurs L’Occitane sales uptick

By Julia Wray 27-Jun-2022

The group also enjoyed record profitability, aided by tighter control of expenses and ‘sensible’ investment in upcoming brands

L’Occitane International has reported a surge in sales of 15.8% for the year ended 31 March, topping €1.78bn.

The L’Occitane en Provence and Elemis owner said the lifting of restrictive Covid-19 measures in Europe and the Americas meant its traditional retail channels saw a strong rebound in footfall, further complemented by its online sales remaining dynamic.

The group expects its online mix to remain at a high level (roughly one-third of total sales) on the back of anticipated growth of its digitally-centric and native brands, including Elemis, LimeLife and Sol de Janeiro.

L’Occitane’s strong full-year sales were somewhat mitigated by Q4, which saw the return of Covid-19 lockdowns in its biggest market, China, in addition to the impact of Russia’s war in Ukraine.

The L’Occitane en Provence brand was the company’s largest growth contributor in full-year 2022 with improvement in all regions and across all product categories, while Elemis’ sales growth accelerated amid a rebound of its spa and wholesale businesses.

In addition, the group enjoyed record full-year operating profit and operating profit margin, which reached their highest levels since listing, at €310.7m and 17.4%, respectively.

According to L’Occitane, this was achieved via tighter control of distribution expenses and operational leverage, alongside a ‘sensible’ step-up of investments in profitable and promising brands and markets.

L’Occitane recently added Sol de Janeiro and Grown Alchemist to its brand portfolio.

Certain one-off items – including gains from the Chapter 11 process its US arm filed for in January 2021 – benefited the company’s operating results.

But, even excluding one-off items, its operating profit margin was still strong at 17%.

“We are proud to report a set of impressive financial results, an excellent outcome that once again demonstrates the resilience of the Group’s brands and teams, as well as our ability to withstand and overcome market turbulences,” said L’Occitane’s Vice-Chairman and CEO, André Hoffmann.

“At the same time, we are keeping a strong eye on the future, with the acquisition of two strong brands in FY2022 that will accelerate our reach into new markets and appeal to younger consumers.

“Given our record results and promising prospects, the board is glad to recommend raising our dividend payout ratio to reward our longstanding shareholders.

“Looking ahead to FY2023, our management is hyper-focused on delivering sustainable value to shareholders, even as the global economy faces uncertainties.

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“Having passed the €1bn sales mark in FY2013, we expect to pass the €2bn sales milestone in FY2023 while retaining healthy profitability.”

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