Douglas reported first-quarter core profit below expectations, with the German perfume and cosmetics retailer flagging intensified promotional efforts amid sluggish demand.
Europe's largest beauty retailer confirmed its forecast for the 2024/25 fiscal year it gave in December, but said it expected adjusted EBITDA to land at the lower end of its given range of €855 to €885 million.
"While European prestige beauty growth was expected to slow further in 2025, today's release by Douglas suggests that has arrived quite rapidly," said Jefferies analyst Henrik Paganetty in a note to clients.
The first quarter is a peak season for Douglas, which sells beauty products from brands like Chanel and Dior, given a number of sales events including Black Friday and Christmas.
It is considered as an indication for how the business will fare for the rest of the year.
Quarterly Highlights
After a strong start to the quarter with sales events like China's Singles' Day, a slowdown in sales momentum in December continued into the first weeks of 2025, the company said, mainly due to muted store sales in Germany and France.
It flagged an additional impact from a very late Black Friday, which in 2024 fell nearly a week closer to Christmas compared to the previous year, potentially shifting consumer spending patterns.
Its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1.5% to €353.5 million ($368.88 million) in the first three months of its fiscal year to 30 September, below the average forecast of 371.1 million in a Vara poll, hit by higher promotional activity to attract customers amid weak consumer sentiment.
Quarterly sales rose 5.8% to €1.65 billion, in line with analysts' estimates.
Douglas, which was highly indebted ahead of its return to the Frankfurt stock exchange, is focusing on repaying its financial obligations and had said in December it would not consider dividend payments until it reaches its goal.
