L’Occitane’s shares
973,
rose sharply after the corporate reported robust gross sales within the 9 months ended December, with analysts saying enterprise is already normalizing post-pandemic.
Shares of the European magnificence merchandise retailer superior 6.7% to 24.65 Hong Kong {dollars} (US$3.15) on Wednesday, on observe for his or her largest proportion achieve since November.
L’Occitane on Tuesday stated it anticipated nine-month gross sales to have grown to 1.915 billion euros (US$2.08 billion) from EUR1.61 billion a yr earlier.
It attributed the gross sales progress to the continued outperformance of its Sol de Janeiro model and the restoration of its of Elemis line.
Sol de Janeiro’s gross sales progress was supported by record-breaking vacation gross sales and the profitable launch of a brand new product, in addition to the enlargement of on-line gross sales, Citi analysts led by Tiffany Feng wrote in a observe.
L’Occitane’s retail gross sales maintained a gentle progress of 4.0%, principally contributed by its China enterprise. The expansion in on-line gross sales was partly pushed by the latest launch of L’Occitane en Provence merchandise on Douyin, the Chinese language model of Tiktok.
Citi analysts stated in a analysis observe that the speedy income progress within the fiscal third quarter ended December was higher than anticipated.
They anticipate the corporate’s enterprise to largely be again to regular in FY 2024 and FY 2025 after the pandemic dragged on earnings in recent times.
The corporate up to date its full-year gross sales progress steering to greater than 20% from 17%, pushed by Sol de Janeiro’s robust efficiency. They’re much less assured in regards to the firm’s predominant model, L’Occitane en Provence, partly attributable to larger advertising and marketing investments and weak journey retail, Citi stated.
The Elemis model may generate important gross sales progress in FY 2024 amid a big advertising and marketing marketing campaign, the analysts stated.
Citi stored its purchase ranking for the inventory and raised its goal worth to HK$29.50 from HK$25.50.
