German perfume and cosmetics retailer Douglas forecast higher 2025 sales and earnings on Thursday, citing a good start to the financial year that included the crucial pre-Christmas period.

The first quarter is a peak season for Douglas, which sells beauty products from brands like Chanel and Dior, given a number of sales events including Black Friday and Christmas.

It forecast adjusted sales of 4.7 billion to 4.8 billion euros ($4.9 billion to $5.0 billion) for the year started on Oct. 1, compared with 4.45 billion in the prior year. Both figures were broadly in line with market expectations.

Its annual net income meanwhile grew fivefold to 84 million euros ($87.4 million), a 25% beat to analysts’ consensus, opens new tab.

Douglas will use these profits to reduce its debt. It is targeting a leverage ratio of 2.0, compared to 2.8 at the end of September.
It will not consider dividend payments until it reaches this goal, which it expects to do after the peak season of the next fiscal year, CFO Mark Langer told reporters in a call.

Douglas’ shares fell around 2% by 1215 GMT amid generally downbeat markets, even as analysts sounded positive on the overall results.

Retailers are facing risks from lower consumer confidence in key markets Germany and France due to rising political and economic uncertainty.

Annual sales were muted especially in France, where Douglas has underperformed due to a high premium beauty penetration and its old store network, CEO Sander van der Laan said.

Organic sales in the segment covering France and Monaco rose only 2.5% in the year, compared to 9.1% for the group and 11% for its biggest segment including Germany, Austria, Switzerland, Belgium and the Netherlands.

The France segment makes up around a fifth of Douglas’ sales, while the main segment generates around a half of them.
However, the CEO said investments to refurbish the existing stores and to launch a new e-commerce platform in France should start bearing result in the Q1.