Beauty giant L’Occitane International said net sales grew 19 percent during the first half of fiscal 2024, to EUR 1.072 billion (USD 1.176 billion), on the back of stellar growth at its Sol de Janeiro skincare brand, and solid gains at L’Occitane en Provence, particularly in China.
During the six months ending September 30, the Hong Kong-listed group said it invested the largest portion of its marketing budget into French skincare brand L’Occitane en Provence, with a focus on key markets, notably China, as well as the U.S., Japan, South Korea and travel retail. As a result, core brand sales in China grew by 22 percent at constant rates, 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 marketing campaigns for its ‘Almond’ range, the launch of the ‘White Lavender’ range and the relaunch of its ‘Immortelle Divine Cream’ that drove increased average ticket value to compensate for reduced offline traffic, said the company.
British skincare brand Elemis grew 7.6 percent during the first half, driven by a 200 percent surge in sales in China, 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, said L’Occitane.
The company’s star performer during the six months was Sol de Janeiro, which maintained its impressive momentum with sales growing by 188.8 percent, with triple-digit growth across all geographies and a strong contribution to the group’s profit, delivering an operating profit margin of 28.9 percent.
The beauty brand’s performance was boosted by a major summer campaign in its home market of the U.S., and is now the group’s second-largest brand, making up 25.2 percent of its net sales.
“We are cautiously optimistic about our prospects in the second half of FY 2024 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,” said André Hoffmann, vice-chairman and chief executive officer of L’Occitane.
“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.”