CICC released a research report stating that it maintains a 'outperform' rating for L'occitane (00973) with a target price increase of 21% to HKD 34.

The report indicated that as of the end of March, the company's fiscal year revenue increased by 24.1% to 2.54 billion euros, and net profit declined by 18% to 93.89 million euros year-on-year, which fell short of market expectations. This is mainly due to lower-than-expected sales growth of its brands ELEMIS and Sol de Janeiro, one-time impairment expenses, high interest expenses, and tax rates.

Due to the downward guidance of these two brands, CICC lowered the revenue and net profit forecast for L'occitane in fiscal year 2025 by 4% and 17%, respectively. In addition, the revenue and net profit forecast for fiscal year 2026 are 3.3 billion and 345 million euros, respectively, which are 4% higher than market expectations.