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 share achieve since November.
L’Occitane on Tuesday mentioned it anticipated nine-month gross sales to have grown to 1.915 billion euros (US$2.08 billion) from EUR1.61 billion a 12 months earlier.
It attributed the gross sales development to the continued outperformance of its Sol de Janeiro model and the restoration of its of Elemis line.
Sol de Janeiro’s gross sales development was supported by record-breaking vacation gross sales and the profitable launch of a brand new product, in addition to the growth of on-line gross sales, Citi analysts led by Tiffany Feng wrote in a be aware.
L’Occitane’s retail gross sales maintained a gradual development of 4.0%, largely 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 mentioned in a analysis be aware that the speedy income development 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 development 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 major model, L’Occitane en Provence, partly because of greater advertising and marketing investments and weak journey retail, Citi mentioned.
The Elemis model might also generate important gross sales development in FY 2024 amid a big advertising and marketing marketing campaign, the analysts mentioned.
Citi saved its purchase ranking for the inventory and raised its goal value to HK$29.50 from HK$25.50.