Holiday high: L’Occitane Q3 sales beat pre-pandemic levels by 14.6% despite Omicron fears
L’Occitane International is the manufacturer of beauty and wellness products and owns brands such as L’OCCITANE en Provence, ELEMIS, Melvita and Erborian.
In the nine months ending December 2021, sales grew by 14.2% to EUR1.38bn (U$1.6bn).
The results were primarily driven by the festive season in the third quarter (Q3), which saw sales grow by 9.5% to EUR650m (U$733m)
The resurgence of COVID-19 in several key markets did not impact L’Occitane’s growth across all of the markets it operates in.
“Despite concerns about the accelerating spread of the Omicron variant, we delivered a strong holiday season in most key markets with growth contribution from all regions, namely Asia Pacific, Europe and the Americas,” said André Hoffmann, vice chairman and CEO of L’Occitane.
Brazil, Russia, Hong Kong, and China reported the largest growth rates at 40.7%, 28.1%, 25.7%, and 18.5% respectively.
China continued to contribute most to the overall growth in Q3, thanks to its “dynamic online and offline sales,” said the group.
The company also observed the recovery of its offline channels in Q3. Retail posted approximately 13% growth compared to the same quarter last year.
At the same time, the online channels remained robust, posting growth of 4.1%.
“The spirit of the season was not just restricted to physical channels, as online sales continued to grow nicely despite the increasingly normalised shopping environment, thanks to our longstanding effort to strengthen our omni-channel presence,” said Hoffmann.
As a result, the company’s brands fared well in the first nine months, with flagship brand L’OCCITANE en Provence posting growth of 14.8%. This accounted for 81.4% of the firm’s overall growth.
However, ELEMIS was the biggest winner, growing 35.9%. The accelerated growth of the brand was driven by the rebound of its spa and wholesale businesses, the acceleration of online channels in both the US and the UK, and the continued rollout in new markets.
Conversely, Limelife, the US beauty company it acquired in 2018, declined by 29.7%, which it attributed partly to the slow recruitment of beauty guides this year.
The company said it was confident of its position moving into the last quarter of FY2022
Last November, L’Occitane acquired a majority stake in US beauty brand Sol de Janeiro, the maker of cult favourite Brazillian Bum Bum Cream that was popular among millennials and Gen Zs.
The acquisition was part of L’Occitane’s strategy to own a portfolio of premium beauty brands across all major geographical regions.
“As we enter the final quarter of FY2022, the solid performances of our key brands will continue to drive our profitability. The addition of Sol de Janeiro to our brand portfolio will also be accretive to our results and will support our healthy and profitable growth in the short and medium-term, while further accelerating our transformation into a multi-brand and geographically-balanced group,” said Hoffmann.