May 4, 2018 / 7:38 AM / 6 months ago

Sweden's Oriflame misses profit expectations as Russian sales fall

STOCKHOLM, May 4 (Reuters) - Swedish beauty products company Oriflame on Friday posted lower than expected first-quarter operating profit and said its Russian sales were falling, sending its share price plunging by 16 percent.

Oriflame, which counts U.S. rival Avon among its competitors, has been reducing exposure to Russia and other CIS countries in the face of tough market conditions.

The company, which sells products ranging from make-up and skincare products to accessories and food additives, said Russia had shown a notable slowdown in a tougher competitive environment. It also faced significant currency headwinds.

Oriflame shares were down 16 percent at 343.80 Swedish crowns by 0730 GMT.

Sales in the CIS region, mainly Russia, fell 15 percent in the quarter, against growth of 15 percent in the same period last year.

“We are taking measures where we meet sales challenges and remain confident in our long-term strategy,” Chief Executive Magnus Brannstrom said in a statement, without giving further details.

Group sales in the second quarter to date are down 2 percent in local currency, hit by timing of catalogues in the CIS and conferences in most regions, the company said.

Oriflame’s operating profit (EBIT) rose to 30.6 million euros ($36.7 million) in the quarter, from 29.8 million euros a year ago. That was below mean expectations of 33.3 million euros in a Reuters poll of three analysts. ($1 = 0.8347 euros) (Reporting by Helena Soderpalm Editing by David Goodman)

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