Boots Net Falls 52.2% in Half

LONDON — Boots Plc, the U.K. pharmacy and beauty retailer, saw first-half profits plummet 52.2 percent to $173.1 million, or 94.5 million pounds, from $362.4 million, or 197.9 million pounds, in the same period last year.

All figures have been converted from the pound at current exchange.

The drop in the six months ended Sept. 30 was due in part to the retailer’s exit from dentistry, chiropody and laser eye treatments in September, at a cost of $99.9 million, or 54.5 million pounds, the company stated.

Price cuts, longer hours open, discounted summer stock and store refurbishments also added to the dive in profits.

Turnover rose 3.1 percent to $4.71 billion, or 2.57 billion pounds, from $4.58 billion, or 2.5 billion pounds.

“This is a demanding year of change and investment. We have made progress with customers responding positively and sales growth continuing,” said the company’s chief executive, Richard Baker.

“The actions we are taking have impacted profit, but are necessary to deliver a sustainable long-term return for shareholders.”

Sales of beauty and toiletries increased 4.1 percent to $1.64 billion, or 893.5 million pounds, from $1.57 billion, or 858.1 million pounds, due to product launches, lower prices, strong promotions in toiletries and promotional activity in fragrances, No. 7 cosmetics and skin care.

Sales in premium cosmetics grew 9 percent and fragrance sales were up 11 percent. The company said that fragrance and cosmetics sales growth was also due to extended distribution as part of beauty department refits in larger stores. Toiletries sales were up by 1.7 percent despite the fact that average prices were 12 percent lower than one year ago.
— Ellen Burney

Acquisitions Lift Henkel Sales

BERLIN — The acquisitions of Dial, ARL and Indola boosted Henkel’s cosmetics and toiletries sales 27.4 percent to 649 million euros, or $840.8 million, in the third quarter. The Düsseldorf-based company’s earnings before interest and taxes rose 16.8 percent to 52 million euros, or $67.4 million in the period. All dollar figures are converted from the euro at current exchange rates.Henkel said its beauty division’s organic sales growth was 3 percent for the quarter, and added that at constant exchange rates, operating profit rose 16.8 percent. Henkel said its hair, cosmetics and skin care businesses continued to perform particularly well, though “the weakness of the European body care segment continued unabated and adversely affected our business.”

The Dial and ARL acquisitions also more than doubled both nominal and adjusted third-quarter sales in North America. North America now accounts for 21 percent of the group’s consolidated sales, up from 12 percent, due to the acquisitions. Operating profit in North America for the group, after adjusting for foreign exchange, leapt 67.6 percent for the period.

Henkel confirmed its group sales and profit guidance for the full fiscal year, which calls for organic sales growth (after adjusting for foreign exchange and acquisitions/divestments) of more than 2 percent. Adjusted EBIT for the group, including Dial, is expected to grow in the midteens.

Group sales, including laundry & home care, cosmetics-toiletries, consumer and craftsman adhesives and Henkel technologies, rose a nominal 17 percent for the quarter to 2.8 billion euros, or $3.6 billion. Third-quarter group EBIT was up 16.7 percent to 202 million euros, or $261.7 million. Earnings per preferred share increased 12.2 percent to 0.92 euros, or $1.19.
— Melissa Drier

L’Oréal Luxury Taps Menesguen

PARIS — Marc Menesguen has been named deputy managing director of L’Oréal’s Luxury Products Division. Menesguen, who took up the post Oct. 1, reports to the division’s president, Gilles Weil. He previously headed L’Oréal’s Japanese subsidiary.

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