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L’Occitane International has seen its net sales increase by 19.1% to €2.5bn (£2.1bn) during the year ended 31 March.
The beauty and wellness products retailer attributed this result to Sol de Janeiro and the performance of L’Occitane en Provence, particularly in China where it “outperformed” in a difficult market.
However, operating profit declined 2.5% to €233.1m (£197m), compared to €239.1 (£202m) in FY23 due to increased marketing investments in key markets and channels. On a management basis, the operating profit margin in FY2024 was 12.1%, a decrease of 3.7 points as compared to a management operating margin of 15.8% in FY2023.
By brand, L’Occitane en Provence underperformed relative to the company’s other brands in terms of global growth and profitability, despite receiving the largest portion of the marketing budget. Despite having an unfavourable impact on the operating profit margin of the brand, these marketing investments drove steady growth of 2.7% at constant rates, mainly driven by double-digit sales growth in China.
Sol de Janeiro continued to perform strongly, growing 167% at constant rates in FY2024 and delivering triple-digit growth across all geographies. It is now the company’s second-largest brand and the largest contributor to its profitability, with an operating margin of 23.6%.
During the year, the group became a certified B Corporation and continued to work on reducing its carbon footprint and plastic pollution, promoting a circular economy for plastics. Currently, 81% of plants in L’Occitane en Provence and Melvita’s raw materials are traceable to the plant’s country of origin with the target to reach 90% by FY26.
In April 2024 the company appointed Laurent Marteau as the new CEO, succeeding André J. Hoffmann, who will remain an executive director and member of the board.
Marteau said: “I would like to sincerely thank Mr. Hoffmann for his valuable contribution during his tenure as CEO, steering the company towards its strategic objectives, including geographical expansion and the successful acquisition of new brands. I look forward to continuing to work with him, the Board and every one of our team members to accelerate and deliver on the company’s transformation and growth.
“Looking ahead, we remain cautiously optimistic about our performance in FY2025. However, the Company’s additional investments in marketing, IT and supply infrastructure and people and planet investments will continue to weigh on our profit margins in the months and years ahead. These investments remain necessary for each of our brands to grow as competition in the global skincare and cosmetics industry intensifies.”
