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L’Occitane returns to pre-pandemic shipments, beauty sector looking better

Cons. Discr. - Retailing 333 Coronavirus 456 Earnings 509 Materials - Chemicals 175 Tariffs 1675 U.S. 4741

Beauty care manufacturer and retailer L’Occitane reported a 15.2% year over year revenue decline in FH1’21 (to Sept. 30), including a 13.0% slide in sales in the U.S., its single largest market. The impact of COVID-19 on store and travel sales declined with sales in FQ2 down by 4.5% after a 22.2% slide in FQ1. 

Aside from the costs of dealing with the pandemic, the firm has also suffered a 30 basis point drag to its profit margins due to higher freight and duty costs. The latter likely reflects the impact of U.S. duties on imports from the EU linked to the two parties’ ongoing aerospace spat, discussed in Panjiva’s research of June 25. L’Occitane has also experienced a surge in inventories to 346 days at the end of the period from 286 the same time a year earlier.

Panjiva’s data shows that U.S. seaborne imports linked to L’Occitane have started to recover in October with a 12.3% year over year improvement having followed a 27.1% slide in Q3 and a steady run of declines since May.

L’Occitane’s recovery comes after normal peak season

Chart segments U.S. seaborne imports linked to L’Occitane by month.   Source: Panjiva

L’Occitane has lagged the wider recovery in U.S. seaborne imports of perfume and cosmetics which increased by 11.6% in September and by 18.1% in October. While the recovery included a 63.7% jump in imports by JAB, owner of Coty, that only reversed a previous rapid downturn.

L’Oreal and Estee Lauder have expanded more steadily with increases of 12.7% and 4.3% respectively in October. Not all firms are expanding though with shipments linked to LVMH and Shiseido continuing to decline in October after weakening in Q2’20 and Q3’20 too.

JAB leads, LVMH lags recovery in beauty imports

Chart segments U.S. seaborne imports of perfume and beauty products by consignee parent firm.   Source: Panjiva

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