Feb 11 (Reuters) - German premium beauty retailer Douglas reported a 5.6% drop in its first-quarter adjusted core profit on Wednesday, citing sales volatility across channels and markets due to
Douglas Reports Higher Profit Than Expected Despite Margin Pressures
Douglas' Financial Performance and Market Challenges
By Emanuele Berro and Cian Muenster
Sales Trends in Core Markets
Feb 11 (Reuters) - German premium beauty retailer Douglas reported an adjusted quarterly core profit slightly above market expectations on Wednesday, even as economic uncertainty and price sensitivity among shoppers continued to weigh on margins.
Impact of Economic Factors
European consumer sentiment has remained fragile over the past year, creating a challenging backdrop for retailers like Douglas. Across key Western European markets such as Germany and France, shoppers have become increasingly price‑sensitive and cautious, weighing on demand for premium beauty products.
Growth Opportunities in Eastern Europe
"With consumers currently thinking twice about spending, competition has gotten tougher, and price promotions have become more important for all players in the market," Douglas CEO Sander van der Laan said.
Adjusted earnings before interest, taxes, depreciation and amortisation fell 5.6% from a year earlier to 333.7 million euros ($397.8 million) in the first quarter through December, slightly above analysts' average forecast in a Vara poll. The corresponding margin of 19.9% was in line with expectations.
Following the post-pandemic upswing, the European premium beauty market is now facing headwinds from multiple external factors, such as geopolitical tensions, trade conflicts and the rising cost of living, van der Laan said.
Still, Douglas' core Western European markets showed first signs of sales recovery in its fiscal first quarter, a peak season for the perfume retailer covering a number of sales events including Black Friday and the busy season leading up to Christmas.
Reported sales in Douglas' core markets of Germany, Austria, Switzerland, the Netherlands and Belgium rose by 0.6% after several quarters of declines, while sales in the French market, which has been weaker than the rest, climbed 1.2%.
In Central and Eastern Europe, a consistently higher consumer sentiment drove sales 7.3% higher. The mostly untapped market represents an attractive growth opportunity for beauty retailers such as Douglas and LVMH's Sephora.
($1 = 0.8389 euros)
(Reporting by Emanuele Berro and Cian Muenster in Gdansk, editing by Milla Nissi-Prussak)
