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PARIS - French beauty products group Clarins posted a bigger-than-expected decline in full year 2006 sales today as its perfumes unit was hit by an end to a key distribution deal and lack of new products.
The maker of trademark face and body creams and Thierry Mugler scents said sales fell 3.1 per cent to 967.2 million euros ($1.87 billion), below an average forecast of 978 million euros among 17 analysts polled by Reuters Estimates.
Beauty product sales rose 8.9 per cent to 643.0 million euros ($1.249 billion), while perfume sales declined 20.5 per cent to 324.2 million euros ($630 million).
Procter & Gamble put an end to a long-standing distribution agreement at the start of 2006, weighing on reported perfume sales in the United States.
Clarins said even excluding this effect, like-for-like perfume sales fell by 0.8 per cent in a year it did not launch any major new products compared with four launches in 2005.
Comparable beauty product sales rose 8.9 per cent in the year. In its shareholder letter, Clarins said that was more than twice as fast as the market grew as it took share from rivals.
Clarins said it was optimistic about achieving "further sales growth" in 2007 thanks to renewal of its make-up line and new products in its skin care and perfume division.
Clarins shares ended 1.1 per cent higher at 58.0 euros ($112) ahead of the news. Since the start of the year they have underperformed France's personal goods index, which includes larger rivals such as L'Oreal and LVMH, by 1.2 per cent.
- REUTERS
