By Matthias Inverardi and Linda Pasquini
(Reuters) -Nivea maker Beiersdorf on Thursday forecast a slowdown in organic sales growth in 2024, after reporting a 10.8% increase in the past year, as it reins in price increases.
Beiersdorf, which typically sets cautious guidance, recorded full-year sales of 9.5 billion euros ($10.3 billion), up from 8.8 billion euros in 2022, in line with Beiersdorf’s guidance for low-double-digit organic growth.
The German company cautioned that sales growth would slow to a mid-single-digit percentage this year.
It sees more moderate growth for its consumer business segment in 2024, as it targets “more reasonable” price increases compared to 2023, while still anticipating high commodity prices and inflation rates, and stretched consumer budgets.
The sector is grappling with softer demand as consumers battling with inflation and a surge in borrowing costs have turned more selective in their purchases.
Shares were down 3% to 133.4 euros at 1015 GMT.
“Consumer segment sustained sector-leading growth in (the fourth quarter), but market expectations were high…hence we may see some modest profit taking today,” Stifel analyst Rogerio Fujimori said in a note to investors.
Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!
By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.
Quarterly organic sales growth of 9% at Beiersdorf’s core division missed analysts estimates of 11%, Fujimori noted, dragged by a drop in sales at its luxury brand La Prairie.
Luxury companies such as L’Oreal have flagged a hit from tighter controls by the Chinese government of the so-called “Daigou” business, where resellers buy inventory at lower prices in other markets and resell it at a discount in the mainland.
Sales at Beiersdorf brands La Prairie and Chantecaille fell by 15.4% and 18.4% respectively in 2023 due to such limitations affecting China and South Korea.
“Even though the Daigou business was a relevant part of our business, we are happy to see that unauthorized distribution contributing to price erosions is now regulated,” CEO Vincent Warnery said in a call.
Beiersdorf said it aimed to return to growth with La Prairie and Chantecaille in 2024. ($1 = 0.9229 euros)
(Reporting by Matthias Inverardi, Linda Pasquini and Eva Orsolya PappEditing by Miranda Murray, Mark Potter and Keith Weir)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.
