L’Occitane has reported a 23% slump in profits for its 2023 financial year.
The decrease in income to €239.1m was attributed to the divestiture of L’Occitane’s Russian arm and resulting share losses from associates in the country.
Impairments from two underperforming brands, Melvita and LimeLife, also contributed to reduced profits during the year.
The brand owner's sales performance fared better, increasing by 19.8% to €2.1bn in the face of surging global inflation and the ongoing cost of living crisis.
This was also supported by an “outstanding” performance from Sol de Janeiro, which saw sales rocket by 135.2% in 2023.
The Brazilian beauty brand benefited from increased sales of its Bum Bum Body Firmeza Oil and the Rio Radiance fragrance mist.
Elemis also grew by 8.9% in 2023, backed by a strong global performance and robust customer engagement.
The anti-ageing brand’s UK sales declined slightly, after the brand made a strategic decision to reduce sales to certain promotion-driven web partners in order to protect brand equity.
The group’s core brand L’Occitane en Provence also saw a sales boost of 6.8% in FY2023.
The Asia-Pacific market remained L'Occitane's best performing region and accounted for 42% of net sales, despite Covid-19 restrictions in China creating a challenging selling environment.
America was the second largest region at 32.6% of net sales, while the Middle East contributed the remaining 25.4%.
André Hoffmann, Vice Chairman and CEO of L’Occitane, said the brand remains “cautiously optimistic” as it heads into 2024.
Despite the war in Ukraine and rising interest rates impacting economies worldwide, Hoffman expects to achieve double-digit sales growth and “healthy profitability” in the new year.
This will be supported by significantly higher marketing investments for L’Occitane’s core brand, as well as the launch of Sol de Janeiro and Grown Alchemist in Asia.
“We are convinced that these investments will not only allow us to capitalise on the clear opportunities this year with the gradual return of international travel and a rebound in China, but also to propel our development as a multi-billion Euro, multi-brand group in the years to come,” he added.