L’Occitane warns of continuing macroeconomic challenges despite sales rise

L’Occitane Group has released its financial results for H1 FY23, revealing growth across all key brands, geographic regions and channels.

Net sales were up 29.3% to £776.1 million (€900.5 million), driven by the inclusion of recently acquired brands, Sol de Janeiro and Grown Alchemist, and growth from the group’s other key brands.

Gross profit increased 30.2% to £622.5 million (€722.3 million), with gross profit margin up from 79.7% to 80.2%.

Retail sales grew 4.4% at constant rates, despite trading with 121 fewer stores as compared with the same period last year. Online sales mix increased 29.4%, supported by digitally-centric brands, such as Elemis and Sol de Janeiro.

All key brands reported growth, with "major contributions" from Sol de Janeiro, Elemis and L’Occitane en Provence. Overall sales further diversified away from the group's core L’Occitane en Provence brand, with Elemis and Sol de Janeiro each accounting for over 10% of net sales.

L’Occitane en Provence's wide geographic presence shielded its performance from stalled growth momentum in Asia, allowing the brand to capitalise on its rebound in other markets, especially Europe.

Elemis was supported by growth in the US and further international rollouts. The cruise line business continued to rebound, whilst online and offline channels remained "dynamic".

Sol de Janeiro reported record sales in the first half, largely due to a well-received summer range. The Beija Flor range also drove growth in all channels, especially chain wholesale, distribution and marketplace.

André Hoffmann, Vice-Chairman and CEO of L’Occitane Group, said: “Despite the challenging environment, the proven resilience of our business ensured that we continued to maintain strong growth momentum.

“Although current macroeconomic headwinds are likely to continue and lead to cost ramifications in all parts of our business, we are highly focused on executing a strong holiday season. We remain committed to harnessing the inherent strengths of our brands to deliver sustainable growth and profitability.”

The news follows the launch of L’Occitane Group's new corporate mission statement, proclaiming "with empowerment we positively impact people and regenerate nature".