Beiersdorf Profit Tops Estimates on New Nivea ProductsAaron Ricadela
Beiersdorf AG, the maker of Nivea cream and Labello lip balm, reported profit that topped analysts’ estimates, aided by new twists on products and higher prices.
Earnings before interest and taxes, excluding some items, increased 17 percent to 253 million euros ($275 million) in the three months through June, the Hamburg-based company said Wednesday. Analysts expected 246 million euros. The stock rose as much as 3 percent.
The maker of cosmetics, shower gels and over-the-counter bandages widened its operating margin by more than a percentage point to 14.9 percent, helped by price increases. Beiersdorf Chief Executive Officer Stefan Heidenreich has hired a new finance chief and is revamping familiar products to stay competitive in a sluggish global market for personal-care products.
“Beiersdorf is finding the top-line going so tough that it concludes that some margin helps to shoulder the poor top-line showing,” Jeff Stent, an analyst at Exane BNP Paribas, wrote in a note.
The company reiterated its forecast for 3 percent to 5 percent organic sales growth this year, even after the first-half increase was 1.4 percent, missing analysts’ 2.3 percent estimate.
Shares of Beiersdorf rose 2.3 percent to 81.80 euros as of 9:06 a.m. in Frankfurt.
Beiersdorf has expanded its flagship Nivea line to include in-shower products, introduced a broader line of men’s shower gel and face cream, and Labello in fruit flavors to combat a broader slowdown in the personal-care category. Global sales of beauty and personal care products grew 3.6 percent last year, compared with 5.2 percent in 2013, according to Sanford C. Bernstein.
A price increase the company enacted in the middle of the first quarter is helping bolster margins this year, Pierre Tegner, an analyst at Natixis Securities SAS, said in a note.
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