(AOF) – In the fourth quarter of 2023, the SMCP group’s sales remained stable compared to 2022 at constant rates, in a macro-economic context which continued to deteriorate: increased geopolitical tensions, sluggish household consumption and persistent inflation. The group’s good resilience in the United States made it possible to compensate for a difficult December in Europe (particularly in France), and less dynamic than expected in China. Despite these headwinds, the ready-to-wear group has chosen to maintain a very rigorous discount policy.
Taking these elements into account, SMCP now forecasts an annual performance that is slightly weaker than announced.
The company is targeting 2023 turnover of around 1.230 billion euros, representing growth at constant rates of 3.8% compared to a previous estimate of average growth between 4-6%.
It also forecasts an adjusted EBIT margin of between 6.4 and 6.6% of turnover (compared to previously 7 to 9% of turnover).
At the same time, the group accelerated its savings plan in the last quarter of 2023 and continued to make its financial solidity a priority: reduction in net debt at the end of December 2023; maintaining a good level of liquidity and reducing inventories compared to 2022.
SMCP will return in more detail to the 2023 annual performances and the continuation of the savings plan for 2024 during the presentation of its results on February 28.
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Contrasting performances in beauty
Penalized by the Chinese market, Estée Lauder suffered a drop in sales of 10% to $15.9 billion for its 2022-2023 annual financial year, which ended at the end of June. The American group’s net profit even fell by 58% over one year to $1.01 billion. In a dynamic global beauty market, the group is therefore showing poor performance, while its rival, Coty, has published very good results. For the year 2022-2023, closed at the end of June, its sales jumped 12%, to 5.55 billion euros, exceeding analysts’ forecasts. Its operating profit more than doubled and its adjusted profit rose 20%. The group intends to continue its move upmarket to exceed 6 billion euros in turnover by 2026. As for L’Oréal, the group recorded a turnover of 20.6 billion euros in first half, up 12% year-on-year. Its net profit increased by 4% to 3.35 billion euros. However, in the third quarter, the growth in activity of the global cosmetics giant slowed down (+4.5% year-on-year), penalized by its sales in China. These players benefit from a beauty market which is expected to grow annually by 6% on average by 2028 according to McKinsey,