L'Oreal sales rise 9.4% as mass market makeup outshines luxury
L'Oreal's Q1 sales better than expected
Driven by Europe, North America
Sales at consumer division, company's biggest, grew 11.1%
Recasts with analyst comment, detail throughout
By Dominique Patton and Mimosa Spencer
PARIS, April 18 (Reuters) -L'Oreal OREP.PA reported a 9.4% rise in first quarter sales on a like-for-like basis on Thursday, beating expectations and easing concerns about a slowdown in the two biggest beauty markets the United States and China.
The French cosmetics giant, which owns the Maybelline and Lancome brands, reported sales of 11.24 billion euros ($11.98 billion) for the first three months to the end of March.
The sales growth exceeded a consensus of a 6.1% rise cited by analysts at Jefferies. Sales were up 8.3% on a reported basis.
L'Oreal, the world's biggest beauty company, said sales in both North America and Europe grew by more than 12%, as its mass market range and dermatological products compensated for weakness in the luxury segment.
The West "continues to power on," Jefferies analysts said following the results, adding North America had defied weakening scanner data and downbeat retailer commentary.
U.S. retailer Ulta Beauty ULTA.O earlier this month rattled the market with comment about a faster-than-expected slowdown in the United States that hit shares across the sector.
Following Thursday's results, L'Oreal's American depositary receipts (ADRs) gained as much as 6.5% in New York trading, while shares in U.S. rivals Estee Lauder EL.N and Coty COTY.N also rose.
CONSUMER PRODUCTS
L'Oreal said its consumer products division, which includes its L'Oreal Paris range of mascaras and Elseve hair gloss and accounts for more than a third of its revenues, grew 11.1% on a like-for-like basis.
The company benefited from higher volumes as well as value in the unit, with strong demand in Europe and emerging markets.
The smaller but fast-growing dermatological beauty unit, which sells La Roche-Posay and CeraVe skincare, grew 21.9%, as it continued to benefit from medical recommendations.
Sales in the luxury division that markets fragrances such as YSL's Libre and Aesop products acquired last year, grew by 1.8%, beating expectations for a decline, as strong growth in Europe and North America helped offset softness in North Asia.
North Asia suffered from an unfavourable comparison base in Travel Retail and sluggish market growth in mainland China, the company said.
Jefferies analysts said travel retail sales were also dented by a Chinese government crackdown on resellers of foreign consumer products, known as "daigou".
L'Oreal has the biggest share of China's luxury beauty market, or about 34%, Chief Executive Nicolas Hieronimus told analysts on a call.
"We are unhappy about the fact that this market is not rebounding the way we expected it to rebound," he said, but added that the company is still outperforming the market.
The company grew 6.2% in China, compared to less than 1% in the broader market, he said.
Shares in L'Oreal, Europe's 6th most valuable listed company, with a market capitalisation of about 220 billion euro ($234.26 billion), have lost 6% so far this year, compared to a 5% fall at U.S. peer Estee Lauder EL.N.
($1 = 0.9383 euros)
LVMH sales growth slips on luxury spending slowdown - Reuters News ID:nL2N3GP22C
Reporting by Dominique Patton and Mimosa Spencer; Editing by Susan Fenton and Barbara Lewis
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
