PZ Cussons, a well-known consumer goods group that specializes in beauty brands such as St. Tropez, Charles Worthington, and Sanctuary Spa, has been significantly impacted by the ongoing Covid-19 pandemic. The company has witnessed a decline in its beauty business, although it still expects to meet its annual profit guidance. This global health crisis has posed numerous challenges for PZ Cussons.

In its recent trading update for the three months ending February 29, PZ Cussons revealed a decrease in third quarter revenue compared to the same period last year. However, the decline rate was lower than that observed in the first half of the financial year. This drop in revenue can be attributed to consumer fragility in key markets and the outbreak of the pandemic during the reporting period.

To mitigate the effects of the crisis, PZ Cussons has shifted its focus to its Cussons Baby, Morning Fresh, and Carex personal and homecare brands. Additionally, the company has taken strategic measures to fortify its balance sheet by selling its Polish beauty brand Luksja and its Nutricima dairy business in Nigeria.

Despite the challenges faced by its beauty business, PZ Cussons has managed to maintain a strong balance sheet, with its net debt amounting to £116 million, compared to £183 million in the same period last year. Furthermore, the company has approximately £147 million worth of undrawn borrowing facilities, which positions it well to handle the consequences of the pandemic.

In the UK, PZ Cussons has witnessed a significant surge in demand for its Carex hand wash and sanitiser gel products, as well as its Imperial Leather soap. However, the company is currently facing difficulties in sourcing packaging and raw materials to meet the increased demand.

The tanning brand St. Tropez has been particularly affected, with a slow recovery expected in the UK, US, and across Europe. The closure of hair salons and the shift in focus towards hygiene and personal care products by retailers have had adverse effects on other beauty brands as well.

In Asia, PZ Cussons’ Indonesian business has remained largely unaffected, while Australia has experienced a substantial reduction in beauty sales. The situation in Nigeria remains uncertain as the Covid-19 pandemic continues to unfold.

Despite the challenges faced by its beauty business, PZ Cussons maintains confidence in its profit guidance, albeit at the lower end of its projections. The company is actively working to adapt to the changing market conditions and navigate the impact of Covid-19 on its operations.

Useful links:
1. Official website of PZ Cussons
2. Website of St. Tropez