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L’Oréal’s Sales Rise 5% in the First Half

November 10, 2011

L’Oréal’s Sales Rise 5% in the First Half

Paris-based beauty giant L’Oréal said group sales for the first half ended June 30, 2011 rose 5% to

L’Oréal recently teamed up with “Project Runway” for a limited edition cosmetics line.
approximately $14.6 billion.

“Organic growth in the first half of 2011 has confirmed the good dynamics of the group, which is further strengthening its worldwide positions, particularly in North America, in Latin America and in Asia Pacific,” said Jean-Paul Agon, chairman and CEO. “The first-half results are up, solid and of good quality. Gross profit is improving, despite the higher cost of raw materials. Operating margin is at a high level, and net profit is growing strongly. At the same time we are continuing to pave the way for the future with our ongoing policy of sustained investments in R&D and advertising & promotion business drivers. Finally, the group’s debt is particularly low.”

Gross profit increased by 5.4%, and came out at 71.5% of sales, compared with 71.3% in the first half of 2010. Despite the unfavorable impact of higher raw material prices, the improved efficiency and productivity of the factories, good stock management and finally the positive conversion effect, resulting from the strengthening of the euro, have contributed to this further improvement, the company said.

Operating profit, at 16.8% of sales, amounted to $2.4 billion. Research and development expenses have increased by 12.2%, reflecting the group’s “determination to step up its investments in research and innovation and, to a lesser extent, the integration of Q-Med,” said Agon.

According to L’Oréal, the professional products division’s profitability has edged down from 21.2% to 19.8%. The profitability of the consumer products division, 20.1%, is slightly down on the first half of 2010, but is considerably higher than the full-year 2010 figure of 18.5%. The profitability of the luxury products division, at 18.9%, has grown strongly.

The active cosmetics division has again recorded very high profitability at 26.3%, the company said.

Blyth Sees 17% Sales Increase in Q2
Blyth, Inc. said net sales for the second quarter ended July 31, 2011 increased approximately 17% to $185.5 million due to significant year-over-year growth at ViSalus Sciences, the company’s weight management/nutritional supplement/energy drink unit, of which it owns 57.5%.

Sales increased 13% on a local currency basis. International sales represented 44% of second quarter sales both this year and last year, the company said.

Nu Skin Reports Record Q2 Results
Nu Skin Enterprises, Inc. posted record second-quarter results, with revenues rising 9% to $424.4 million.

“We are pleased with our second-quarter results and are confident that our performance keeps us on track for another strong year,” said Truman Hunt, president and chief executive officer. “We continue to fuel our momentum by attracting new distributors, leveraging our exclusive ageLOC product portfolio, focusing on growth in our emerging markets, and consistently improving profitability and shareholder value. We are also looking forward to the fall introduction of additional anti-aging products, which we anticipate will continue to drive consumer demand and steady business growth.”

Second-quarter revenue in North Asia grew 12% to $183.1 million. Revenue was positively impacted 11% by foreign currency fluctuations. Local-currency revenue in South Korea increased 25%. As expected, Japan reported a 10% year-over-year decline, largely due to the impact of the natural disasters in March. The number of executive distributors in the region was up 6% and the number of active distributors was up 1% compared to the prior year.

Revenue in Greater China declined 2% to $79.4 million for the quarter and was positively impacted 6% by foreign currency fluctuations. The decline was due to a very significant ageLOC product launch in the second quarter of 2010 that boosted revenue by approximately $25 million, contributing to a 53% increase reported in the prior year. Local-currency revenue in Mainland China improved 77%, Taiwan was down 8% and Hong Kong experienced a 61% decline. Individual market comparisons for the quarter were impacted by regional convention sales in Hong Kong in the prior year. Both the executive and active distributor numbers increased 14% compared to the prior-year period.

Second-quarter revenue in the Americas was $59.8 million, compared to $62.4 million for the prior-year period. Revenue in the US and Canada declined 6% and 14%, respectively, while Latin America improved 21%. The number of executive distributors in the region declined 6% compared to the prior year, while the number of active distributors declined 2%.

Revenue in South Asia/Pacific rose 29% to $59.2 million driven by 11% gains in foreign currency fluctuations. Quarterly revenue in Europe was $42.9 million, a 22% improvement. Results in the region were positively impacted approximately 14% by foreign currency fluctuations. Executive and active distributor counts in the region increased 7% and 8 percent, respectively, compared to the prior year.

“Our strong first-half performance has laid the foundation for what we believe will be a solid second half of 2011,” said Hunt. “We anticipate the largest product launch in our history when we introduce new ageLOC products at our global distributor convention. We also continue to have high expectations for continued growth in emerging markets, particularly Mainland China and South Asia.”

Divine Skin Posts Record Quarterly Results
Divine Skin Inc. posted its highest quarterly revenue, $2.33 million, in the second quarter, 79% ahead of last year.

“One of our challenges has been keeping up with demand,” said Divine Skin CEO Daniel Khesin. “We have invested significant resources into setting up a more robust operations platform. Now we have the right people in the right jobs managing the right plans for procurement, manufacturing, and accounting infrastructure. We will therefore continue to scale up to much more impressive numbers.”

The results come after a busy four months of announcements, including the naming of cosmetics veteran Robin Powell, respected for his success at Sebastian and Tigi, as president; growth in salon distribution, including new channels totaling thousands of additional doors both domestically and abroad and more, the company said.

Ulta Posts Q2 Gains
Ulta Beauty posted favorable financial results for the second quarter and first six months, which ended July 30, 2011.

For the second quarter, net sales increased 22.6% to $394.6 million. Comparable store sales (sales for stores open at least 14 months) rose 11.3%, while operating income leaped 78.2% to $39.7 million. Net income climbed 83.0% to $23.9 million.

For the first six months, net sales rose 21.6% to $780.6 million. Comparable store sales increased 11.2%, and operating income improved 72.7% to $78.7 million. Net income rose 76.6% to $47.2 million.

“We are pleased with our strong momentum and better-than-expected second quarter results, which we believe demonstrates Ulta’s increasing authority in beauty,” stated Chuck Rubin, president and chief executive officer of Ulta. “Specifically, we offer an affordable and fun beauty experience, a trend right product and service offering, exciting marketing that drives repeat purchases and a highly engaged team focused on providing fabulous customer service. We continue to expect fiscal 2011 to represent significant progress toward our long term goals.”