BODY SHOP SALES CLIMB 18.3 PERCENT

Byline: James Fallon

LONDON — The Body Shop International PLC Thursday revealed its turnaround continues with a 9.5 percent increase in aftertax profits to $6.6 million on an 18.3 percent rise in sales to $228.4 million for the half year ending Aug. 26.
This compares with aftertax profits of $6 million on sales of $193.1 million in the corresponding period a year earlier. (Dollar figures were converted from the English pound at current exchange rates.)
The growth came in all geographical regions, led by the U.S. and an improved performance in the U.K., Gordon Roddick, Body Shop’s co-chairman, said in a statement. The increase in sales stemmed partially from a higher proportion of sales through company-owned stores and the impact on wholesale sales of a stepped-up program of product development. Products introduced in the first half included the S.O.S. Save Our Skins sun line, Lemongrass Deodorizing foot care and the Juice It shower line.
In North America, Body Shop had a 267 percent leap in operating profits to $3.1 million from $858,000 on an 18 percent rise in sales to $68.1 million from $57.5 million a year earlier. Same-store sales were up 7 percent in the U.S. and 3 percent in Canada. Body Shop is experimenting with a new store format in two locations in the U.S. with plans to roll it out next year. It also has upgraded its supply-chain management systems in the last six months. Body Shop currently has 212 stores in the U.S., with two openings in the first half.
The U.K. division reported flat operating profits of $3.1 million on a 12 percent rise in sales to $88.5 million from $79.1 million. The growth came through new stores, with 12 opened in the first half to give Body Shop 298 in the U.K. The openings included a third factory outlet, a fifth store located in railway stations and a trial store in a motorway gas station. It also continues to roll out its Body Shop Direct home-selling service, with more than 2,200 consultants at the end of August, Roddick said.
The greatest number of openings during the first half came in continental Europe and the Mideast, where 23 new stores were added to increase the total to 659. The openings included six in Germany, four each in Italy, Switzerland and Saudi Arabia and three in Norway. But the region suffered a 74 percent drop in operating profits to $858,000 from $3.3 million on a 15 percent rise in sales to $41.7 million from $36.2 million. The drop in profits stemmed from the weakness of the euro against the pound and the costs associated with opening new regional offices in Europe, Roddick said.
In the Far East, Body Shop reported a 15 percent rise in operating profits to $6.6 million on a 48 percent increase in sales to $30 million. This compares with operating profits of $5.7 million on sales of $20.3 million a year earlier. Same-store sales were flat year-on-year, but the company added 16 stores in the first half for a total of 414 stores in the region.

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