By  on July 27, 2007

PARIS — Groupe Clarins posted second-quarter 2007 net sales up 7.6 percent year-on-year at 254.2 million euros, or $343 million at average exchange, for the three-month period. On a like-for-like basis sales spiked 10.2 percent.

The strong second-quarter performance, which followed growth of 3.7 percent from January to March, was thanks to a solid marketing plan, high advertising spend and promotions on existing products, the company said in a statement Thursday.

"Consequently, preliminary and nonaudited accounts show a decrease in the operating margin by around three points compared to the 2006 first half," the statement said.

For the half ended June 30, Clarins registered net sales of 494.6 million euros, or $658 million, up 4.2 percent year-on-year. On a like-for-like basis the increase was 6.9 percent.

In the half, the firm's beauty division, which comprises the flagship Clarins brand, grew 6.4 percent to 342 million euros, or $455 million. The company attributed the increase to revamped treatment introductions and its makeup line, which boosted sales 25 percent.

The group's fragrances, which include scents by Thierry Mugler, Azzaro and Clarins, rang up sales of 131.1 million euros, or $174 million, up 5.1 percent year-on-year. Clarins said Mugler sales were boosted by women's scent Eau de Star and men's fragrance Ice Men.

Its fragrance distribution operations declined 24.4 percent to 21.5 million euros, or $29 million. The firm said this slowdown lost momentum compared with a decline of 37.1 percent on March 31. New brands added to the distribution portfolio in the U.S. have generated disappointing sales, the firm said.

By region, at average exchange for the half, Europe reported a sales increase of 8.8 percent to 323.1 million euros, or $430 million; North America slumped 15.7 percent to 72.3 million euros, or $96 million, due to retailers involved in a destocking policy, Clarins said; Asia was flat at 55.3 million euros, or $74 million, while "other countries" spiked 20.3 percent to 43.9 million euros, or $58 million.

For the second half, Clarins is readying the introductions of My Blend by Dr. Olivier Courtin, as well as treatment items Double Serum Generation 6 and Younger Longer. Clarins maintains its forecast of 6 percent sales growth at constant exchange for the full year.

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