L'Occitane profit slumps 30pc

Business | Samantha Wong 12 Jun 2018

Beauty products retailer L'Occitane (0973) reported a 30 percent decline in annual net profit, due mainly to foreign currency losses, and the consequences of tax reforms in the United States.

The French chain, which sells mainly facial care products and fragrances, said net profit fell from 132 million euros (HK$1.22 billion) to 93.3 million euros for the year ended March 31 compared with the previous year.

The losses were due largely to inter-company trade and current accounts settlements, notably in Chinese yuan, Hong Kong dollar, Russian ruble and Korean won, but partly offset by gains from the Japanese yen, Swiss franc and Australian dollar, the company said in a filing to the Hong Kong stock exchange.

Basic earning per share was 0.066 cents, down from 0.090 cents. Net sales grew 4.6 percent to 1.32 billion euros, while gross profit margin stood at 83.3 percent. The board has recommended an increase in dividend payout ratio to 45 percent from 35 percent last year, with a proposed final dividend of 0.0297 euros per share.

Hong Kong sales grew 8.3 percent, contributing 17 percent to overall growth, said Thomas Levilion, deputy general manager of finance and administration at L'Occitane International.

Over the year, L'Occitane did not add to its 34 stores in Hong Kong but opened 41 new outlets across the world, taking the total number to 1,555 stores. It closed five in China, bringing the number of stores down to 197 in the mainland.

Share of L'Occitane fell 0.6 percent to HK$13.54 at the close yesterday.

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