"},"content":{"rendered":"<\/p>\n
<\/p>\n
L’Or\u00e9al<\/strong><\/b> performed less well than expected in the third quarter of 2024<\/strong><\/b>, ended September 30, weighed down in particular by the Chinese market.<\/strong><\/b> The fact that \u201cgrowth in the global beauty market is normalizing<\/strong><\/b> as the year goes by\u201d, after the post-Covid explosion, was also mentioned by Nicolas Hieronimus, the CEO of<\/strong><\/b> the world leader in an interview with AFP.<\/p>\n <\/p>\n L’Or\u00e9al’s Professional Products and Luxury Goods<\/strong><\/b> divisions held up better<\/strong><\/b> than Consumer Products and Dermatological Beauty.<\/p>\n <\/p>\n The Number One in Beauty thus posted third-quarter sales up 2.8% on a reported basis and +3.4% on a comparable basis<\/strong><\/b> to 10.28 billion euros. This performance was below the consensus expectations of<\/strong><\/b> Factset and Bloomberg<\/strong><\/b> analysts, i.e. 10.52 billion euros and 10.57 billion euros.<\/p>\n <\/p>\n For the first nine months, the Group grew by 6% on a reported and comparable basis<\/strong><\/b> to 32.4 billion euros.<\/p>\n\n <\/p>\n In the October 23 press release, Nicolas Hieronimus hailed \u201c solid growth, well distributed between value and volume,<\/strong><\/b> despite the multiple turbulences that impacted our third quarter.\u201d The bad surprise of the quarter was the worsening situation in the Middle Kingdom.<\/p>\n <\/p>\n The head of L’Or\u00e9al admitted that \u201cthe situation in the Chinese market<\/strong><\/b> has not only not improved over the summer, but is tending to be even more difficult<\/strong><\/b>\u201d. But he also said that he and his teams \u201c believe inthe future of this market<\/strong><\/b> \u2018 and hope \u2019that the government stimulus will help improve consumer confidence\u201d.<\/p>\n <\/p>\n In the third quarter, North Asia was the only market to post a decline, down -4.4% on a reported basis and -6.5% on a comparable basis<\/strong><\/b>. Over the first nine months,<\/strong><\/b> sales were down 3.5% on a reported basis and 3% on a comparable basis<\/strong><\/b>, to 7.4 billion euros.<\/p>\n <\/p>\n Behind this underperformance, L’Or\u00e9al cites the situation in mainland China, \u201cwhere the beauty market, already in decline in the second quarter, continues to contract, due in particular to the low level of consumer confidence<\/strong><\/b>\u201d. However, the L’Or\u00e9al Luxe<\/strong><\/b> division continues to \u201cgain share<\/strong><\/b> in the selective beauty market, which remains particularly difficult\u201d.<\/p>\n <\/p>\n The news about Travel Retail in the Chinese market<\/strong><\/b>, on the other hand, is a mixed bag. While this segment returned to growth in the third quarter<\/strong><\/b>, \u201csales, particularly in Hainan\u201d, the island paradise of local tourism and duty free, \u201cremain under pressure\u201d.<\/p>\n <\/p>\n On the other hand, on the same continent, mature Japan<\/strong><\/b> became the leading foreign beauty group, outperforming a dynamic market<\/strong><\/b>\u201cdriven by both local consumers and tourists\u201d.<\/p>\n <\/p>\n \u201cIn Europe and North America, as well as in emerging markets<\/strong><\/b>.\u201d Nicolas Hieronimus stresses that \u201cunderlyingtrends<\/strong><\/b> in the beauty market remain solid<\/strong><\/b>\u201d. In the third quarter<\/strong><\/b>, sales rose by +5.2% on a reported basis and +5.6% on a comparable basis<\/strong><\/b> in Europe. Over the first nine months<\/strong><\/b>, the Old Continent thus maintained its strong growth of +9.9% as reported and +9.3% on a comparable basis<\/strong><\/b> to 10.7 billion euros. \u201cAll categories posted double-digit growth, led by hair care and fragrances\u201d.<\/p>\n <\/p>\n \u201cThe Group outperformed the market<\/strong><\/b> in most countries, particularly in the Spain-Portugal, UK-Ireland and Germany-Austria-Switzerland clusters<\/strong><\/b>, as well as in a number of medium-sized countries,\u201d the press release points out.<\/p>\n <\/p>\n North America is also proving resilient<\/strong><\/b>, thanks to both \u201can expanded presence across all distribution channels and ongoing value creation\u201d. In the third quarter,<\/strong><\/b> sales grew by 4.3% on a reported basis and 5.2% on a comparable basis.<\/strong><\/b> From January to September,<\/strong><\/b> sales in North America rose by +7.1% (reported) and +6.9% (comparable)<\/strong><\/b> to 8.9 billion euros.<\/p>\n <\/p>\n Finally, the Sapmena-SSA<\/strong><\/b> region (South Asia, Pacific, Middle East, Africa) and Latin America proved to be the most dynamic zones in the third quarter as in the first nine months.<\/strong><\/b> Their contribution to Group sales is, admittedly, more modest than that of mature countries.<\/p>\n <\/p>\n Sales in the SAPMENA-SSA zone soared by +7.9% (reported) and 8% (comparable) in the third quarter<\/strong><\/b>, and by +12.1% and 12.6% to 2.8 billion euros over the first nine months.<\/p>\n <\/p>\n While sales in Latin America grew by just 0.7% (reported) but +8.7% (comparable) in the third quarter<\/strong><\/b>, and by +10.3% and +12.3% to 2.5 billion euros in the first nine months.<\/p>\n <\/p>\n Among the divisions, L’Or\u00e9al Luxe showed the most remarkable dynamism, with the Professional Products division.<\/strong><\/b><\/p>\n <\/p>\n Sales for the Luxury division rose by 8% on a reported basis and +5.8% on a comparable basis in the third quarter<\/strong><\/b>, and by +5.3% and +3.4% to 3.8 billion euros in the first nine months.<\/p>\n <\/p>\n \u201cIn North America and in emerging markets, the Division maintained double-digit growth and remained very dynamic in Europe.<\/strong><\/b> In mainland China and Travel Retail Asia, the Division outperforms a beauty market still in decline, and continues to strengthen its leadership. In Japan, L’Or\u00e9al Luxe continues its double-digit growth in a market that remains dynamic.\u201d<\/p>\n <\/p>\n In the Fragrance market, where L’Or\u00e9al Luxe is Number One, double-digit growth is exceptional.<\/strong><\/b> \u201cAll segments contributed to growth: Couture brands continued their spectacular performance, supported by their flagship products, in particular Yves Saint Laurent Libre, Valentino Born in Roma and Prada Paradoxe<\/strong><\/b>. Super-premium collections such as Maison Margiela Replica and Armani Priv\u00e9<\/strong><\/b> continue to make strong progress, as do the Azzaro and Victor&Rolf<\/strong><\/b> brands, which are making a major contribution to growth\u201d.<\/p>\n <\/p>\n In make-up<\/strong><\/b>, L’Or\u00e9al Luxe reports \u201ca very solid<\/strong><\/b> comeback performance by Yves Saint Laurent,<\/strong><\/b> with double-digit growth in all regions\u201d, while \u201cPrada continues its ambitious expansion<\/strong><\/b>\u201d and \u201cValentino is enjoying strong growth<\/strong><\/b> with the launch of its latest innovation, Spike Valentino\u201d.<\/p>\n <\/p>\n Professional Products sales rose by 4.8% on a reported basis and +6.1% on a comparable basis<\/strong><\/b> in the third quarter, and by +4.8% and +5.8% to 3.6 billion euros in the first nine months.<\/p>\n <\/p>\n Consumer Products fared less well, with a drop of -0.6% (reported) and a rise of +1.4% in the third quarter<\/strong><\/b>, and an increase of +5.3% (reported) and +6.4% (comparable) to 12 billion euros over the first nine months.<\/p>\n <\/p>\n Dermatological Beauty also posted a slowdown in the third quarter (-1.6% (reported) and +0.8% (comparable)).<\/strong><\/b> Over the first nine months, the division nevertheless continued to grow, by +9.8% and +11.3% to 5.3 billion euros.<\/p>\n <\/p>\n Despite this less pleasing third quarter, J\u00e9r\u00f4me Hieronimus stressed that \u201coverall, the beauty market continues to grow,<\/strong><\/b> including in units, demonstrating once again its resilience and long-term potential\u201d, and that his Group \u201ccontinues to outperform<\/strong><\/b> \u201d thanks to its power of innovation, the agility of its teams and its ability to reallocate resources to new growth drivers.<\/p>\n <\/p>\n And despite a \u201ccontext still marked by economic and geopolitical uncertainties\u201d, the Group says it is \u201cconfident of achieving another year of growth in sales and operating income\u201d<\/strong><\/b>. And it is preparing its \u201cown beauty stimulus for 2025. \u201d<\/p>\n <\/p>\n On the other hand, the group would surely have done without another less pleasant simulis. It has estimated at \u201cjust over 250 million euros\u201d the exceptional contribution<\/strong><\/b> introduced in the draft 2025 budget, which it will have to pay. This tax, aimed at groups with sales in excess of one billion euros<\/strong><\/b>, is intended to help offset the French public deficit.<\/p>\n <\/p>\nBelow expectations<\/h2>\n
<\/h2>\n
Decline in North Asia<\/h2>\n
<\/h2>\n
Trends remain solid<\/h2>\n
<\/h2>\n
Dynamic emerging markets<\/h2>\n
<\/h2>\n
L’Or\u00e9al Luxe in good shape<\/h2>\n
<\/h2>\n
Consumer Products and Dermatological Beauty at half-mast<\/h2>\n
<\/h2>\n
Confident in the future<\/h2>\n
<\/h2>\n
\n
\n\t\t