Lush warns profits will bomb as retailer struggles to break America

Soap and effervescent bath bomb maker Lush has warned that profits will almost halve this year despite record sales as trouble mounts in America.

The cosmetics firm said it was expecting profits to fall 40% in 2018 mostly due to a significant slowdown in sales across the pond as well as losses in Germany.

It made pre-tax profits of £73.4 million on sales of £743 million for the year to June 30, thanks to opening larger shops, up from £43 million and £563 million respectively the year before. Same-store sales at home were up by 12.2%, accounts showed.

Lush was founded in Poole, Dorset in 1995 by dermatologist Mark Constantine and Liz Weir, a beauty therapist.

It sells handmade products in almost 50 countries from 932 shops – including franchises and joint ventures. It plans to focus on so-called spa shops as well as online growth. It paid £3 million in dividends for the financial year.