L’Oreal sales up despite muted recovery in China

Third quarter sales at L’Oreal rose 11.1%, led by growth in Europe and the United States but missing expectations for a strong rebound in China.

The Paris-based group, which owns labels ranging from Maybelline to Lancome, said on Thursday that sales for the three months to the end of September came to 10 billion euros, an 11.1% rise on a like for like basis at comparable scope and constant exchange rates, just below expectations for an 11.5% rise according to consensus estimates cited by Barclays.

L’Oreal sales in North Asia, which mostly come from mainland China, were down 4.8%, missing expectations for a 14.4% rise, with the company pointing to an impact on its travel retail business from changes in the country’s policy regarding selling through personal shoppers known as daigou. In mainland China, where the beauty market is “broadly stable” despite a “muted recovery,” the company said sales grew 7.7% and it continued to gain market share.

China, where high youth unemployment and a property crisis have complicated the country’s post-pandemic rebound, has been a key focus for investors.

L’Oreal, which accounted for the biggest share of the country’s $78.9 billion beauty and personal care market last year, has been gaining market share there in recent months, and its luxury division is the market leader in high end cosmetics.

It sells skincare, makeup and fragrance under brands ranging from Maybelline to local label Yuesai and high-end Lancome, as well as Yves Saint Laurent, Valentino and Prada.