Croda International Adjusts Profit Outlook Due to Weak Demand in Beauty Care Business

British speciality chemicals group Croda International has revised its profit outlook for 2023, citing destocking and weak demand in its beauty care business, particularly in North America. The FTSE 100 company now expects its group adjusted profit before tax for 2023 to be in the range of £300 million to £320 million, compared to its previous forecast of £370 million to £400 million.

The global beauty care industry has been grappling with sluggish demand throughout the year, with a slow recovery in duty-free and travel destinations, especially in China. Additionally, consumers have been cutting back on non-essential purchases due to high inflation, while companies face challenges in protecting profit margins amidst rising costs.

Croda, whose customers include renowned brands such as Estee Lauder, Unilever, and Procter and Gamble, reported lower-than-expected sales volume in its beauty care business during the third quarter, particularly in the North American market. This weakness persisted from the previous three-month period.

To mitigate the impact of these challenges, Croda has implemented various cost-cutting measures since June. These measures include optimizing production through plant shutdowns and reduced shift patterns.

While the company faces headwinds in the short term, it remains committed to navigating the current market conditions and delivering value to its customers. Croda’s expertise in specialty chemicals positions it well to adapt to changing industry dynamics and capitalize on future growth opportunities.

Overall, Croda International’s ability to proactively address the challenges in the beauty care market demonstrates its resilience and commitment to long-term success.