Luxury beauty and fashion company Puig reported a steep drop in its first reported earnings as a listed company on Friday, citing costs related to its initial public offering (IPO) earlier this year, sending its shares down as much as 13 percent.
The Barcelona-based company behind perfume brands Rabanne, Carolina Herrera and Jean Paul Gaultier said net profit fell 26 percent to €153.8 million ($171 million), while sales grew 10 percent in the first half of the year. Its operating margin fell to 14.4 percent from 15.3 percent.
The company, which listed on the Madrid stock exchange in May, mainly blamed the costs related to its initial public offering and employee bonuses for the disappointing earnings.
Chairman and CEO Marc Puig said in an interview he remained confident that the company, which owns a number of prestige perfume, skincare and makeup brands, can grow faster than the 6 percent-7 percent forecast for global premium beauty market.
“This has been our first examination,” Puig said. “We have been consistent with our guidance and we will maintain it for the rest of the year.”
Puig, which also owns makeup and skincare brands such as Charlotte Tilbury, reported a 10.7 percent rise in fragrances and fashion sales and 11.6 percent higher revenues in skincare, but its makeup business sold 1.8 percent less in the period.
The company’s CEO said makeup brands such as Christian Louboutin had suffered from their exposure to a sluggish Asian market.
He said he expected to continue to see strong momentum across EMEA and was optimistic about sales in the U.S. for the rest of the year. Asia-Pacific, which contributes 9 percent of its sales, will remain soft, he said. EMEA generated 53 percent of its total sales and the rest 38 percent came from the Americas.
The post-pandemic boom in fragrances continues, with Jean Paul Gaultier perfumes enjoying popularity on TikTok among young, male consumers, Puig added.
Puig ruled out further acquisitions in the short-term, but said that M&A will continue to be a growth driver, especially in businesses such as skincare.
“Puig’s results were below our expectations,” Joaquin Robles, a senior analyst at XTB, said in an email. “Its sales were about 2 percent lower than we estimated.”
The company said it expects net revenue and operating profit for the second half of the year to be higher due to an expected increase in demand ahead of the holiday season.
JPMorgan analysts said that while its first-half results were weaker than expected, its business remained solid.
“The results were clearly dragged down by weak sell-in in make up, but the underlying health of the business remains strong in fragrances,” JPMorgan said.
By Corina Pons
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