L’Oréal: still dazzling annual results held back by the Chinese market

On the strength of double-digit growth across all its divisions and almost all its regions, L’Oréal has reported its third consecutive year of growth in 2023 results, reflecting the exceptional dynamism of the beauty market, with only the slowing Chinese market missing the mark.


On Thursday February 8, L’Oréal published annual results that reflected the global beauty market: particularly buoyant. The world’s number one beauty company saw net profit grow by 8.4% and sales by 7.6%.


The L’Oréal Luxe division is now the world leader in luxury beauty sales, ahead of American giant Estée Lauder.


The only fly in the ointment is that the leader in perfumes and cosmetics recorded a fourth quarter 2023 performance below analysts’ expectations, due to a North Asian market weighed down by “a sluggish Chinese beauty market”.

A third year of double-digit growth

The world’s number one beauty company posted net profit growth of 8.4% “despite persistent inflationary and geopolitical tensions“, says the press release.


For its financial year ending December 31, 2023, the l’Oréal group posted sales of 41.18 billion euros, up 7.6% on a reported basis and 11% on a comparable basis. Group Chairman Nicolas Hieronimus hailed “a third year of double-digit growth“. He added, “Not only have we strengthened our position as the world’s number 1 beauty company, but we have also passed the 40 billion euro sales mark for the first time in our history.” However, sales “came in below analysts’ expectations, and fourth-quarter sales were slower (+2.8%) than in the previous quarter”, points out Antoine Fraysse-Soulier, Head of Market Analysis at Etoro.

“If we exclude 2021, which is the year of the post-Covid rebound, which is a little atypical, it’s our best comparable growth for 20 years (+11%), and this at a time when the world is not the friendliest,” L’Oréal CEO Nicolas Hieronimus told AFP.


Finally, the company’s profitability improved last year, with an operating margin of 19.8%, against 19.5% in 2022.


Its CEO is particularly confident for 2024, considering that “in times of uncertainty, people want to have pleasant experiences and feel good about themselves – and beauty enables them to do this”. A phenomenon he has dubbed the “dopamine effect” of beauty. The CEO predicts further growth in sales and profits over the next financial year.

In particular, the Group can rely on its investments in beauty tech and biotechnology. In addition to the December acquisition of Lactobio, a leader in probiotic and microbiome research, the Group announced in January the signature of an agreement to acquire the entire share capital of Gjosa, a Swiss company pioneering the development of water micronization technology, as well as two minority stakes via its BOLD venture capital fund. These transactions involved Timeline, a Swiss biotechnology company developing innovative longevity solutions in the food, beauty and health sectors, and the Chinese luxury perfume brand To Summer.

The 37-brand group has been identified as a key player on the beauty tech scene. Nicolas Hieronimus and Barbara Lavernos were invited to present the Opening Keynote at CES in Las Vegas. L’Oréal became the first beauty company to be invited, and won a record seven Innovation Awards at CES.


Luxury, hair care and dermatological beauty on top

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Featured Photo: © Lancôme/L’Oréal

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Victor Gosselin
Victor Gosselin is a journalist specializing in luxury, HR, tech, retail, and editorial consulting. A graduate of EIML Paris, he has been working in the luxury industry for 9 years. Fond of fashion, Asia, history, and long format, this ex-Welcome To The Jungle and Time To Disrupt likes to analyze the news from a sociological and cultural angle.

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