Beiersdorf Posts 9-Month Sales Growth, Flags China Weakness
The renowned skincare giant, Beiersdorf, which owns popular brands like Nivea, has reported a notable increase in its group sales for the first nine months of 2024. Despite the positive trend, the company has highlighted ongoing challenges within the Chinese luxury market.
From January to September 2024, Beiersdorf achieved an organic sales growth of 6.5%, taking its total sales to €7.55 billion ($8.15 billion), up from €7.26 billion during the same period in the previous year. This growth was significantly bolstered by a resurgence in the North American market and impressive performances in the skincare segment.
Vincent Warnery, CEO of Beiersdorf, noted in a statement, “The luxury market however, especially in China, continues to be challenging.” The company’s luxury brand, La Prairie, faced a 7.3% drop in organic sales over the first three quarters of the year. This decline was largely attributed to the ongoing challenges in the Greater China region, which also negatively affected the travel retail market.
The Chinese luxury market has been experiencing a slowdown due to weakened consumer demand amid its struggling economy. This has had widespread effects, impacting not only Beiersdorf but other industry players who rely heavily on discretionary spending, including major French luxury companies.
Despite challenges in the luxury sector, Beiersdorf’s core brands have demonstrated unwavering resilience. The consumer segment saw sales rise by 7.3% to reach €6.3 billion in the first nine months of 2024. This strength was largely driven by double-digit growth rates of skincare brands Eucerin and Aquaphor in North America, as well as robust Nivea sales in emerging markets during the third quarter.
Looking ahead, Beiersdorf maintains a positive outlook for 2024. The company continues to expect organic sales growth in the range of 6-8%. It also anticipates that the margin on earnings before interest and taxes (EBIT), excluding special factors, will surpass the levels from the previous year.
While the Chinese luxury market presents ongoing hurdles, Beiersdorf’s diverse portfolio and strategic focus on core consumer brands seem to provide a solid foundation for future growth. As the company navigates these complexities, the continued revitalization of key markets and the introduction of innovative skincare solutions will likely play crucial roles in its ongoing success.
Overall, Beiersdorf’s ability to adapt and focus on growth avenues, even amidst global challenges, underscores its resilient business strategy and commitment to maintaining a competitive edge in the dynamic beauty and skincare industry.
