MADRID (Reuters) -Fashion and fragrance company Puig reported lower-than-expected sales and a fall in its operating margin in the first half of 2024, sending its stock down by 9% in its first reported earnings as a listed company.
The Barcelona-based company behind perfume brands Rabanne, Carolina Herrera and Jean Paul Gaultier said net profit fell 26%to 153.8 million euros ($171 million), while sales grew 10%. Its operating margin fell to 14.4% from 15.3%.
Chairman and CEO Marc Puig said he remained confident about the company’s core business of prestige perfumes but said make-up brands such as Christian Louboutin had suffered from their exposure to Asia, resulting in a decline in sales.
“We expect to continue to see strong momentum across our core geographies in EMEA and Americas, while we believe that Asia-Pacific will continue to remain soft for the remainder of the year,” Puig said in an call with analysts.
Net profit fell 26%, mainly due to one-off costs of the IPO which included 94 million euros in cash bonuses to employees.
The company reported net revenue of 2.17 billion euros ($2.41 billion) in the year to June and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of 410 million euros, 7.4% higher than a year before.
Puig reported 10.7% higher fragrances and fashion sales, 11.6% higher revenues in its skincare brands but its makeup business sold 1.8% less in the period.
“Puig’s results were below our expectations,” Joaquin Robles, a senior analyst at XTB, said in an email. “Its sales were about 2% lower than we estimated.”
Puig went public in May after buying brands such as luxury label Byredo to diversify and better compete with bigger rivals. It was Spain’s biggest initial public offering in nearly a decade.
Puig said its share of the global selective distribution fragrance market stands at 11%.
It is the first time the company, which also owns makeup and skincare brands such as Charlotte Tilbury, has reported first half results. Puig began trading on Madrid’s stock exchange in May.
The company, which in January began the process of acquiring Dr. Barbara Sturm, 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 Christmas.
JPMorgan said in a note to clients that while first half results came in softer than expected, its core 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.
($1 = 0.8995 euros)
(Reporting by Corina Pons; editing by Charlie Devereux, Emelia Sithole-Matarise and Miral Fahmy)
