Nivea maker Beiersdorf has reported an increase in group sales for the first nine months of 2024, but flagged persisting challenges in the Chinese luxury market.
Nine-month sales rose 6.5% organically to €7.55 billion ($8.15 billion) from €7.26 billion a year earlier, helped by a rebound in North America and growth in its skin care segment.
"The luxury market however, especially in China, continues to be challenging," CEO Vincent Warnery said in a statement.
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'Oréal and industry bellwether LVMH, among others.
Quarterly Highlights
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.
Meanwhile the company's core brands have remained resilient. Sales in the overall consumer segment rose 7.3% to €6.3 billion 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 positive tone of this call is likely to be well received, although we acknowledge that Beiersdorf's management is usually optimistic,' Barclays said in a note.
The company recently said that a 'far-reaching transformation' will be required to achieve net zero emissions by 2045, but added that it is committed to the cause.
News by Reuters, additional reporting by ESM.
