Puig reports profit drop amid staff bonuses and Asia demand dip
- Puig reported net revenues of 2.2 billion euros for the first half of 2024, an 8.5% increase from the previous year.
- The company experienced a 27% decrease in net profit, attributed to significant staff bonuses following its IPO.
- Challenges in the Asian market, particularly in China, are impacting consumer spending and contributing to a decline in sales.
Puig, a Barcelona-based beauty conglomerate founded in 1914, reported a net revenue of 2.2 billion euros for the first half of 2024, marking an 8.5% increase compared to the same period last year. Despite this positive revenue growth, the company experienced a significant 27% drop in net profit, which fell to 157 million euros, largely due to substantial cash bonuses totaling 94 million euros awarded to staff following its initial public offering (IPO) in May 2024. The IPO raised 2.6 billion euros, making it one of the largest floats in Europe this year. The company’s CEO, Marc Puig, noted that Puig is outperforming the premium beauty market, yet the firm faces challenges stemming from a difficult economic landscape characterized by geopolitical tensions. The ongoing struggles in Asia, particularly in China, have raised concerns about consumer spending, which has been adversely affected by fluctuating economic conditions. Christian Louboutin, a brand under Puig's beauty license, has also reported declining sales due to its heavy reliance on the Asian market. This has contributed to a broader downturn in beauty product sales in the region, further complicating Puig's financial outlook. As a result of these factors, Puig's shares fell over 10% following the profit announcement, reflecting investor concerns about the company's future performance amid a challenging sales environment.