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UPDATE 1-Oriflame Q1 EBIT just below expectations
May 10, 2017 / 6:35 AM / 4 months ago

UPDATE 1-Oriflame Q1 EBIT just below expectations

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May 10 (Reuters) - Beauty products firm Oriflame reported on Wednesday a first-quarter operating profit that was up from a year ago helped by growth at key product categories Skin Care and Wellness, but slightly below market expectations.

* Q2 to-date local-currency sales +11 pct

* Q1 EBIT 29.8 mln EUR ($32.45 mln) vs a year-ago 21.1 mln vs Reuters poll forecast 31.4 mln, operating margin 8.8 pct

* Swedish Oriflame’s long-term targets are for an EBIT margin of 15 pct and 10 pct local-currency annual sales growth

* Q1 sales +11 pct with local-currency sales in single-biggest market Russia -4 pct

* Oriflame, whose rivals include U.S. Avon, has been reducing its exposure to Russia and other CIS countries in the face of tough market conditions

* Its shares are up 27 pct YTD after they more than doubled in value last year

* CEO Magnus Brannstrom in report: “During Q1 2017 we continued to focus on balancing sustainable sales development with healthy profitability improvements. All in all, a positive start of 2017, even though macroeconomic challenges remain in several markets”

* Oriflame’s products, which are sold by direct-selling agents, range from make-up and skin and haircare to accessories and food additives

* The company has a strategy to particularly grow its Skin Care and its Wellness product categories - currently its biggest and smallest, respectively ($1 = 0.9184 euros) Source text for Eikon: Further company coverage: (Reporting By Anna Ringstrom, editing by Terje Solsvik)

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