International Flavors and Fragrances reports a drop in fragrance sales
NEW YORK International Flavors and Fragrances this quarter has reported a dip in profits due to higher input costs and low profit margins, especially a dip in fine fragrance and beauty care sales in the United States, the company said last week.
The company reported that international sales were up by 6 percent at a total of $618 million, but did not report profit gain from that figure. However, the gross profit margin for the quarter decreased from dropped from 41.9 percent the prior year to 40 percent. The company cited a shift in the sales mix to lower margin products which affected all of its business regions and markets.
“Rising material and input costs have put pressure on our profitability throughout the year. And while we have made some progress toward our cost recovery goals, our year-to-date efforts have been insufficient to maintain our operating margins,” IFF chief executive officer. Robert Amen. said.
Amen also said that IFF plans to “navigate through the current economic environment” to reach its planned objectives for the year.
In the beauty care/fine fragrances division, IFF’s North American sales saw a decline in sales of 14 percent compared to last year. However, results for the latest quarter were up from the previous two, IFF reported.
L’Oreal changes forecast after disappointing third-quarter results
CLICHY, France Cosmetics maker L’Oreal reduced sales and profit forecasts for the third time in four months—once in July, once in August—and is preparing for a tough upcoming year. Third-quarter sales rose 3.4 percent to 4.27 billion euros, while Eastern Europe showed a 30 percent; Asia, a 14 percent increase; Latin America, a 6.9 percent increase; and Western Europe a 3.9 increase.
“Since September, we have noted a clear slowdown in some markets in western Europe and North America, and have been confronted with a contraction of purchasing by some distributors in the current economic crisis,” said chief executive officer Jean-Paul Agon in a statement. “[L’Oreal] distributors in the United States and some European countries are being very cautious and are reducing inventories.”
The company predicted in August “close to a 6 percent” rise in organic revenue and are now saying approximately 4 percent for the year. Organic sales are already slowing, showing an increase of 2.7 percent this quarter, compared with a 5.1 percent increase in the second quarter.
L’Oreal is the third major cosmetics to cut its predictions in three days. Estee Lauder Cos. announced their changed forecast Tuesday, and Avon Products Inc. lowered their forecast Thursday.
Bare Escentuals announces third quarter 2008 results
SAN FRANCISCO Cosmetic company Bare Escentuals announced Thursday their 2008 third fiscal quarter results ending Sept. 28, 2008.
Net sales for the third fiscal quarter were $130.2 million, a 3 percent increase from $126.6 million in the same period last year. Third-quarter net income was up 12 percent, from $20.5 million, or $0.22 per diluted share, to $22.0 million, or $0.25 per diluted share.
For the nine months ended September 28, 2008, Bare Escentuals reported a 12 percent increase in net sales from $366.4 million in the same period last year to $409.1 million this year. Net income showed a 20 percent increase from $61.1 million, or $0.66 per diluted share, to $73.4 million, or $0.79 per diluted share. The company expects a 10 percent sales and earnings growth compared to last year.
“While the challenging economic climate is clearly putting pressure on the consumer, we continue to grow although we recognize that we can do things better,” said Leslie Blodgett, chief executive officer. “We are taking proactive steps to further distinguish ourselves from competition, strengthen and grow our customer base, and extend our leading market share.
“We recently took actions aimed at rationalizing the operating and cost structure of the company. The result is a leaner and more effective organization, which we believe is necessary to navigate the current difficult economic environment and best position the company for sustained, profitable growth.”