Body Shop warns of hefty drop in profits

Body Shop International is blaming the weather, transport difficulties and poor sales of some new lines for a disappointing Christmas and warns its profits will fall by between 10% and 15% this year.

While worldwide it saw like-for-like sales, excluding income from new stores, ahead 2% on last year, sales in the UK and Ireland fell by 2% compared with last year.

It says the problems experienced over Christmas were compounded by the strength of the pound in Europe, which cost the group around £3m in adverse exchange rates.

Chief executive Patrick Gournay says: "Whilst overall retail sales have shown positive growth, our expectations for our new product programme to drive this performance to a higher level during the second half were not met."

Christmas accounts for more than 70% of the group's annual profit and, at the half-year stage in October, Body Shop said it was looking forward to significantly improved profits on the back of a good festive season.

It now says this failed to transpire, leading to today's warning.

Like-for-like sales in the US in the nine weeks to December 24, were up 4%; in the Middle East and Europe, they were ahead 5%; and in the Asia Pacific region, up 1%.