Why did Puig record a 26% drop in profits if sales were up in H1 2024?
The business, which launched onto the Spanish stock exchange in May this year, attributed this 26% net loss to costs related its initial public offering (IPO).
Its sales have grown by nearly 10%, to 2.2bn, for the first half of 2024. So how come it has recorded –26% losses?
During an analyst presentation company CEO Marc Puig said the disappointing earnings were related to both its initial public offering and large employee bonuses.
He also said that despite this, he predicted annual growth of around 6 - 7% until late 2027.
In a press statement, Marc Puig also noted that while fragrance and fashion is still its strongest segment, the company has “further diversified into skin care” and that this was “the fastest-growing business segment during the first half, with a strong organic growth component and a strategic brand acquisition.”
Puig acquired a majority stake in German doctor-derma brand Dr. Barbara Sturm in January 2024.
Strong sales in Europe
The CEO also said he expected to continue to see strong sales results across the EMEA region (which has generated 53% of global sales so far in 2024) and was optimistic about the company’s performance in the US for the rest of the year, which generated 38% of sales in the first half of 2024.
However, Puig was not so optimistic about the Asia-Pacific region, which contributed 9% of its sales so far this year.
The company, which also owns luxe brands such as Charlotte Tilbury, Rabanne and Jean Paul Gaultier, reported a 10.7% rise in fragrances and fashion sales and 11.6% higher revenues in skin care.
Although, sales for its normally thriving makeup business dropped by 1.8% less in the first half of 2024.
Marc Puig said that this was because some of its luxury colour cosmetics brands such as Christian Louboutin had suffered from their exposure to the flagging Asian market.
During the results announcement, Puig also revealed that in the second half of 2024, Rabanne will unveil the Million Gold line with Gigi Hadid as the face, while the ever-popular Jean Paul Gaultier brand will also launch two additional fragrances.
