PZ Cussons beauty business dented by Covid-19

(Sharecast News) - Imperial Leather maker PZ Cussons said on Thursday that its guidance on profit remains within consensus but at the lower end, as its personal care business is boosted by the Covid-19 pandemic but the beauty segment takes a hit.
In an update on trading for the third quarter to 29 February, the company said overall revenue in the quarter declined against last year, albeit at a reduced rate compared to the first half of the year.

Key markets continued to be impacted by consumer fragility, and towards the end of the period, the start of the pandemic, it said.

In Europe & the Americas, Carex benefitted from a "significant" increase in demand towards the end of the quarter, driven by the virus crisis. However, the company's beauty segment faced tough competitive conditions, particularly in the UK.

Cussons said it was experiencing "exceptionally high" demand for its Carex hand wash and sanitiser gel products and Imperial Leather soap in the UK.

"Our focus remains on sourcing, producing and distributing these. Our team has shown exceptional ability to reconfigure products and supply chains rapidly, but we continue to face challenges in sourcing packaging and raw materials to enable us to fully meet demand," it said.

Within the beauty business, self-tanning product St Tropez has been hit hard by the social distancing measures in place in the UK, US and across Europe. The group's other beauty brands have also been hit as retailers focus on hygiene and personal care and as hair salons close.

Cussons said its "significant" beauty marketing activities planned for the fourth quarter have been cancelled and it expects the business to be slow to recover.

"Whilst there is a high level of uncertainty regarding the full impact of Covid-19 across all of our different businesses and markets continues, at this point our guidance on profit remains within consensus, albeit at the lower end."