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Groupe Clarins Reports 34.6% Drop in Net Profits in First Half

French cosmetics maker still expects 4% full-year sales growth at constant exchange rates.

PARIS — Groupe Clarins’ results were heavily impacted by foreign exchange rates in the first half of 2008.

 

The company reported Friday net profits dropped 34.6 percent to 24 million euros, or $36.7 million at average exchange, versus first-half 2007. (All first-half 2007 numbers are on a pro forma basis, excluding the Stella Cadente beauty business, the license for which Clarins no longer holds.) At constant exchange, Clarins’ net profits declined 13.8 percent.

 

The company’s operating income fell 32 percent to 27.8 million euros, or $42.5 million. At constant exchange, it dipped 6.6 percent. Currency exchange had a negative effect of 10.4 million euros, or $15.9 million, on Clarins’ operating income.

 

As reported, for the first half of 2008, Clarins posted sales of 485.8 million euros, or $743.5 million, down 1.8 percent. At constant exchange, revenues rose 4.1 percent in the period. Exchange rate changes negatively impacted the firm’s revenues by 28.9 million euros, or $44.2 million.

 

“Given the sluggishness of cosmetics markets and the general worldwide economic slowdown, Clarins Group anticipates full-year sales growth of 4 percent at constant exchange rates,” the company stated. “Results for the period should still be adversely affected by unfavorable foreign exchange trends, the continued worldwide economic downturn and the group’s strategy of maintaining the level of its advertising and promotional efforts.”