German perfume and cosmetics retailer Douglas is betting on the European premium beauty market to keep driving growth, it said on 14 August after reporting higher earnings for its fiscal third quarter.

“Our continued growth clearly confirms that our strategic focus on premium beauty strongly resonates with our customers,” CEO Sander van der Laan said in a statement.

Douglas, one of Europe’s largest perfume and cosmetics retailers, is counting on its core premium beauty business as it sees robust growth in the segment across the region, which led it to raise its annual sales outlook last month.

To focus more on the core beauty business, the group operating 1,860 stores and an e-commerce website recently sold online pharmacy Disapo, which industry sources said had failed to generate strong profits.

However, Douglas’ net loss more than doubled in the quarter to 71.6 million euros ($78.7 million), as it used cash to reduce debt in April following its initial public offering.

The group, which sells beauty products from brands like Chanel and Dior, made a bleak return to the Frankfurt stock exchange in March, with its shares falling 12% below the issue price amid fading investor confidence in luxury and retail.

Since then, the stock has continued to fall and was trading 30% below the IPO price as of Tuesday’s close. However, Deutsche Bank analysts have said the price performance is unjustified given the company’s fundamentals.

Douglas’ adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 5.6% to 162.9 million euros in the third quarter through June, compared to 154.3 million a year earlier.