Body Shop warning after tough Christmas

Cosmetics specialist Body Shop warned on profits today after sales in the UK and United States came in lower than expected over Christmas.

Shares fell 14% as the group lowered market expectations for the year to February 25, despite reporting strong progress for its operations in the Asia Pacific region and Europe, Middle East and Africa.

Body Shop said like-for-like sales in the UK and Ireland were up 1% during the 10 weeks to New Year’s Eve, compared with a 5% rise a year earlier. In the Americas sales fell 1% as both markets experienced difficult trading conditions and customer “traffic” dropped on the high street and in shopping malls.

As well as lower than expected Christmas sales, the group faced costs in excess of £4m (€5.8m) to cover reorganisation plans.

As a result operating profits would now be level with, or marginally ahead of last year, it said.

Chief executive Peter Saunders said: “The underperformance in the USA and UK, together with the impact of the non-recurring costs, underplays our potential.”