Germany's Douglas lowers current financial year forecast on weak customer sentiment

(Reuters) -German perfume and cosmetics retailer Douglas on Thursday lowered its forecast for the current financial year, citing a slowdown in the European premium beauty market, particularly in Germany and France.

The group, which makes half of its sales in Germany, Austria, Switzerland, Belgium and the Netherlands, now expects net sales of 4.5 billion euros ($4.88 billion) for the 2024/25 financial year, down from its previous forecast of 4.7 billion to 4.8 billion euros.

"The already weak customer sentiment in the market has continued to deteriorate since February, leading to a decline in footfall in stores and traffic online," the retailer said.

Europe's largest beauty retailer also lowered its net income forecast to around 175 million euros, from its previous forecast of 225 million to 265 million euros.

Last month, Douglas reported first-quarter core profit below expectations, attributed to intensified promotional efforts amid sluggish demand.

Its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1.5% to 353.5 million euros in the first three months of its fiscal year to September 30, below the average forecast of 371.1 million in a Vara poll.

Douglas, which was highly indebted ahead of its return to the Frankfurt stock exchange, was focusing on repaying its financial obligations and had said in December it would not consider dividend payments until it reaches its goal.

($1 = 0.9222 euros)

(Reporting by Nilutpal Timsina in Bengaluru; Editing by Alan Barona)