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L’Or\u00e9al<\/strong> is outperforming LVMH<\/strong>. The global cosmetics giant reported a 4.5%<\/strong> increase in third-quarter revenue to \u20ac10 billion<\/strong> on Thursday, surpassing expectations.<\/p>\n <\/p>\n “In an uncertain economic and geopolitical context, we remain confident in our ability”<\/em> to outperform the market and “achieve another year of revenue and earnings growth in 2023,”<\/em> said L’Or\u00e9al’s CEO, Nicolas Hieronimus<\/strong>.<\/p>\n <\/p>\n L’Or\u00e9al, which had seen double-digit sales growth for several quarters, dipped below the 10% mark in the second quarter of 2023, with revenue reaching \u20ac10.193 billion (+9.5%).<\/strong> Over the first nine months of 2023, the company posted a 9.4%<\/strong> increase in revenue, totaling \u20ac30.57 billion<\/strong>.<\/p>\n “Despite the slower-than-expected recovery of the beauty market in mainland China, L’Or\u00e9al continued to make strong progress,”<\/em> said Mr. Hieronimus.<\/p>\n <\/p>\n <\/p>\n However, the drawback of this performance is the decline in sales in North Asia<\/strong>, mainly in mainland China<\/strong><\/a>. During the third quarter, the group saw a 15%<\/strong> drop in sales in North Asia, totaling \u20ac2.04 billion, a 4%<\/strong> reduction over the first nine months. This decline is attributed to a “slow recovery in China” and a change in “travel retail” policy.<\/p>\n <\/p>\n These results are below analysts’ expectations, who had anticipated organic growth in North Asia of 14.4%<\/strong> over the first nine months.<\/p>\n <\/p>\n Nonetheless, L’Or\u00e9al maintained its growth thanks to solid performances in Europe and the United States<\/strong>. Sales in North America increased by 11%<\/strong>, reaching \u20ac8.3 billion<\/strong>, with growth in “all divisions.” Europe saw a 15.3%<\/strong> increase over nine months, with sales reaching \u20ac9.74 billion<\/strong>. This growth is spread across all countries, with particularly strong momentum observed in the “Germany-Austria-Switzerland and Spain-Portugal” regions, “the United Kingdom, the Nordic countries, and Eastern Europe.”<\/p>\n <\/p>\n Latin America<\/strong> showed the highest growth (+27.4%<\/strong>) and reached \u20ac2.29<\/strong> billion in sales. Additionally, the South Asia, Pacific, Middle East, North Africa, and Sub-Saharan Africa region<\/strong> recorded a 15.6%<\/strong> growth, surpassing \u20ac2.5 billion<\/strong> in sales.<\/p>\n <\/p>\n <\/p>\n The luxury division, including brands such as Lanc\u00f4me, Yves Saint Laurent, and Giorgio Armani<\/strong>, saw its sales decline by 3% to \u20ac3.5 billion<\/strong>. However, revenue over nine months maintained a growth of 2.9%<\/strong>, totaling \u20ac10.8 billion<\/strong>.<\/p>\n <\/p>\n In contrast, consumer products, including brands like Garnier, Maybelline, and L’Or\u00e9al Paris<\/strong>, recorded a 10.8%<\/strong> growth over nine months, reaching nearly \u20ac11.5 billion<\/strong>. This growth was driven by Europe and “emerging markets,” particularly Mexico and Brazil.<\/p>\n <\/p>\n L’Or\u00e9al’s recent acquisition of the A\u0113sop<\/strong><\/a> brand marked a turning point, expanding its portfolio of high-end brands and opening new growth opportunities, particularly in China and the Travel Retail sector.<\/p>\n <\/p>\nDecline in sales in China<\/h2>\n
Support from brands and emerging markets<\/h2>\n
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