The first half of 2024 for the Spanish specialist in perfumes, fashion and beauty disappointed investors. Puig shares, floated on the Barcelona Stock Exchange in May, were punished.
Puig missed the start of the new financial year with the publication, on September 6, of half-year results deemed disappointing by investors.
The Catalan group’s first financial announcement since its flotation on the Barcelona Stock Exchange on May 3 was met with a cool reception. Its share price fell by over 12% on September 6. By the evening of September 11, the stock was down more than 18% over one week, 12% over one month and 27% over three months.
The perfumes, beauty and fashion specialist reported a 26% drop in net profit to 154 million euros in the first half of 2024.
Below forecasts
Puig’s portfolio includes brands such as Paco Rabanne, Jean-Paul Gaultier, Carolina Herrera and Charlotte Tilbury, and licenses such as Christian Louboutin and Adolfo Dominguez.
Half-year sales nevertheless rose by 9.6% to 2.1 billion euros, driven by fashion and fragrances, the EMEA zone (Europe, Middle East and Africa) and, to a lesser extent, the Americas. However, this was still below the expectations of experts from the Spanish banking group Banco Sabadell, who were expecting 2.2 billion euros…
Regarding its underperformance in terms of earnings, the Spanish group explained that the drop in net profit was essentially due to the “exceptional costs” of its IPO, “as well as M&A expenses and other adjustments ”. For the occasion, Puig wanted to give “ extraordinary recognition” to all its employees in the form of a cash bonus of 94 million euros. Puig also pointed out that its adjusted EBITDA had increased by 7.4%, to 410 million euros, and its adjusted net profit by 4.8%, to 238 million euros.
Meeting commitments
But the Spanish group’s arguments and the attention paid to its employees hardly moved investors, who punished it on the stock market.
This reaction came as no surprise to the experts on the Bankinter blog, who expected the stock to be penalized on the day the results were published. However, they also pointed out that Puig was “respecting the guidelines announced at the time of its IPO” and thatits“single-digit comparable sales growth” was “above the average for the high-end perfume sector, enabling it to gain market share”.
Finally, they praised a “stable” EBITDA margin and net debt “within the Group’s objectives, with a gearing ratio of less than 2 times EBITDA”.
In the shorter term, looking ahead to 2024 as a whole , Puig forecast “single-digit comparable sales growth and stable adjusted EBITDA compared to 2023, with upside potential in the medium term”.
A jump in skin care sales
In more detail, Puig’s first-half performance was primarily driven by its skincare division, up 25.2% to 256 million euros, and, to a lesser extent, by its historic fragrance and fashion divisions, which grew by 10.7% to 1.59 million euros. These two specialties continue to account for the bulk of Puig’s business, representing 73% of total sales.
By contrast , its make-up segment fell by 1.8% to 334 million euros.
“Although our core business remains fragrances and fashion, we have capitalized on the opportunity for rapid growth in skincare, a segment that is becoming increasingly crucial to our portfolio,” emphasized Marc Puig, the Group’s CEO. To take advantage of the boom in these increasingly popular products, Puig is counting on both organic and external growth. Last January, for example, it acquired the German brand Dr Barbara Sturm.
On the fragrance front , established names such as Jean Paul Gaultier, Carolina Herrera and Rabanne confirmed their relevance by making it into the world’s top 10 perfumes.
EMEA, dynamic Americas, stagnant Asia
In terms of markets, Puig grew by 10.5% in EMEA (Europe, Middle East and Africa) and 7% in the Americas.
By contrast, Asia-Pacific stagnated at +0.7%, weighed down by a lack of appetite for Christian Louboutin ‘s glamorous shoes and products by Charlotte Tilbury, the make-up artist to the stars.
Generally speaking, “to judge the Group’s evolution”, the Bankinter blog believes thatwe must now “wait for the performance of the first half of 2025, which will no longer be affected by the costs of the IPO”.
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Read also > Puig gets a new visual identity for its 110th anniversary and IPO
Photos à la Une : © Jean Paul Gaultier/Puig
