By Elizaveta Gladun and Linda Pasquini
(Reuters) – Nivea maker Beiersdorf reported on Thursday a rise in group sales for the first nine months of 2024, and said it expected a strong fourth quarter, despite persisting challenges in the Chinese luxury market.
Shares in the company rose 3.9%, to 132 euros in early trade, with analysts pointing to management confidence in the quarters ahead.
Nine-month sales rose 6.5% organically to 7.55 billion euros ($8.15 billion) from 7.26 billion euros a year earlier, helped by a rebound in North America and growth in its skincare segment.
“We expect strong performance overall in the fourth quarter,” CEO Vincent Warnery said in a statement, flagging however that the luxury market, especially in China, continues to be challenging.
A slowdown in Chinese consumer demand amid a weak economy has hit the luxury sector, which is reliant on discretionary spending, weighing on quarterly sales at French peer L’Oreal and industry bellwether LVMH, among others.
Sales in Beiersdorf’s luxury brand La Prairie dropped by 7.3% in organic terms in the first three quarters, driven by the continued weakness of the Greater China region, and its negative impact on the travel retail market, the company said.
Warnery said the company expects no recovery in the brand in the fourth quarter, but is optimistic about 2025, and pointed to current strong growth in Japan and opportunities in the U.S.
La Prairie accounted for 7% of total sales in 2023.
Aside from weaker consumer spending in China, the company is also grappling with parallel trading, as shoppers increasingly turn to second-hand and grey markets amid price hikes and economic pressures. Warnery said Beiersdorf is taking legal action to combat copycat products.
Elsewhere, the company’s core brands have remained resilient. Sales in the overall consumer segment rose 7.3% to 6.3 billion euros in the first nine months of 2024.
This was helped by double-digit growth rates for the skincare brands Eucerin and Aquaphor in North America and strong Nivea sales in emerging markets in the third quarter, the company said.
Beiersdorf still expects organic sales growth of 6-8% in 2024 and margin on earnings before interest and taxes (EBIT), excluding special factors, to be slightly above the previous year’s level.
“Given weak results and nervous commentary elsewhere in beauty this results season we think that the (management’s) positive tone (…) is likely to be well received,” analysts at Barclays wrote in a note to clients.
($1 = 0.9267 euros)
(Reporting by Elizaveta Gladun, Linda Pasquini, and Matthias Inverardi; Editing by Rachel More, Lincoln Feast and Jacqueline Wong)
