L’Occitane Posts Big Gain in Q2

L’Occitane International S.A. reported net sales for the three months increased 18.8% to €216.5 million ($266 million at current exchange rates). The gain was helped by exchange rates. Excluding foreign currency translation effects, net sales growth was 10.7%.

In terms of geographic areas, China, UK and Russia were the best-performing markets in net sales growth, reaching 41.4%, 34.8% and 31.0%, respectively. The Hong Kong market maintained an upward trend, with net sales growth at 21.9%.

“During the period under review, solid results were recorded which demonstrates our efforts in maintaining business performance and sales growth amid the challenging operating environment,” said Reinold Geiger, chairman and CEO, L’Occitane. “Looking forward, the company will continue to invest and take advantage of potential business opportunities which will strengthen our foundation for future growth and continue to deliver strong returns for our shareholders.”

During the period under review, sales were impacted by the global economic slowdown in several countries, including Japan, Taiwan and Brazil. However, the company said that its global footprint allowed it to take advantage of the better operating environment in some countries and the strong momentum in countries like the USA, the UK and Russia contributed to maintain a solid growth.

In terms of same store sales growth, Russia, UK and US demonstrated robust growth at 11.8%, 11.7% and 11.1% respectively. Same store sales growth in Hong Kong was impacted by cannibalization effects impacting three stores but resulting in significant sales increases in the same areas. Furthermore, two stores were renovated in Hong Kong during the quarter under review. Excluding the stores where these effects occurred, the same store sales growth was 18.6%.

During the period under review, the company continued to strengthen its presence through retail store network expansion. For the three months ended 30 June 2012, the company increased the total number of own retail stores to 1,086 and recorded a net increase of 33 openings over the period under review. This includes nine in Japan, eight in Russia, two in China and the USA respectively. Despite stalled growth from Same Store Sales in Japan, the Company continued to emphasize its expansion in the region, as Non-comparable stores in Japan contributed significantly, at 14.4%, to overall growth.