Beauty retailer Douglas tempers growth forecasts for 2026 and beyond

By Emanuele Berro ‌and Cian Muenster

Dec 18 (Reuters) - Beauty retailer Douglas cut its sales guidance for 2026 ‍and ‌beyond on Thursday, as a cautious sentiment among shoppers weighs on its core markets ⁠in the western and central parts of ‌Europe.

The German group expects net sales of between 4.65 billion and 4.80 billion euros ($5.46 billion and $5.64 billion) in 2026, up from the 4.58 billion euros it reported for the financial year that ended ⁠in September, but below the 5-billion-euro target it had set in 2023.

The personal care and beauty sector has ​seen weakening demand as lower-income shoppers become more reluctant ‌to pay a premium for branded goods.

Annual ⁠sales growth, which was mainly driven by Central and Eastern Europe, was held back by Douglas' sluggish key markets in Germany, Austria, Switzerland, the Netherlands, Belgium and ​France, which make up around two-thirds of its revenue.

The group's new medium-term guidance aims for yearly sales growth in a low- to mid-single-digit percentage, compared to its 7% average growth target from 2023.

Shares of Douglas fell up to 10.6% in early trading before ​paring ‍some losses to trade 2.5% ​lower by 0930 GMT.

The debt-laden beauty retailer reiterated that it would consider paying a dividend once it reaches its net leverage target, which aims for a debt equal to between 2.0 and 2.5 times its adjusted earnings. At the end of September, this ratio stood at 2.9.

The perfume and cosmetics retailer, which sells products ranging from its own brands to ⁠luxury names like Chanel and Dior, also said it was evaluating an expansion from continental Europe into the Middle East and Gulf ​Cooperation Council countries, with a final decision expected in the course of 2026.

Douglas reported slightly lower than expected adjusted core earnings (EBITDA) of 768.4 million euros for the 2024/25 financial year, citing changing consumer behaviour including higher price sensitivity, ‌promotional competition and lower supplier bonuses.

($1 = 0.8514 euros)

(Reporting by Emanuele Berro and Cian Muenster in Gdansk and Helen Reid in London, additional reporting by Canan Sevili; editing by Milla Nissi-Prussak)