German consumer goods firm Beiersdorf reported slowing sales growth for its Nivea skin care brand in the second quarter on Tuesday, although it confirmed its outlook for 2019.
First-half sales came in at €3.837 billion, a rise of 4.8% after stripping out currency effects and acquisitions, compared to 6% in the first quarter.
Beiersdorf shares fell 2.6% in early trade.
Nivea sales expanded 3.2% in the first half. In the first quarter sales had increased by 4.9%.
"The results of the first six months show that we are on track," commented Stefan De Loecker, CEO of Beiersdorf AG. "We see that the needle is moving in the right direction – throughout the entire business. Our commitment is to outperform the market, create added value for our consumers with accretive innovations, and ensure sustainable profitability."
Disruptive Brands
Mass-market labels like Nivea are struggling amid the rise of small, disruptive brands, and as consumers favour more natural ingredients and premium products, prompting Beiersdorf to push pricier lines like La Prairie and Eucerin.
Last month, Beiersdorf announced it was setting up an innovation unit to develop new "indie" brands and strengthen existing lines such as Labello, 8X4, and Hidrofugal.
First-half operating earnings rose 1% to €592 million, stripping out special factors of €11 million relating to Beiersdorf's acquisition of U.S. sun care brand Coppertone $550 million in May.
Beiersdorf confirmed its guidance for 2019 group sales growth of 3-5%, and an operating margin of 14-14.5% in its core consumer business unit.
Shares in French rival L'Oreal fell last week after second-quarter sales growth missed forecasts and the cosmetics maker said it expected little improvement this year in the United States where demand for make-up is slowing.
News by Reuters. Click subscribe to sign up to ESM: European Supermarket Magazine.
