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With a 15% increase in sales, L’Oréal did better than analysts’ forecasts in the first quarter. Its luxury division, weighed down by China at the beginning of the year, did less well than its consumer products, which are nonetheless part of a premiumisation trend.
L’Oréal continues to move upmarket and consolidate its position as the world’s number one beauty company.
In the first quarter of 2023, its luxury division, which had moved up to first place in 2021, fell back to second place behind its consumer products division (Elsève, Garnier, Maybelline, L’Oréal Paris, etc.).
With an increase in turnover of +6.5% on a like-for-like basis to 3.7 billion euros, the luxury sector did less well than the consumer sector (+16% to 3.8 billion euros in turnover).
But if the consumer division “outperforms the market”, it is also because it “benefits from its premiumisation strategy (with more expensive products) while continuing to grow significantly in volume” says the cosmetics and perfumes giant.
Better than expected
All in all, L’Oréal’s sales rose by 15% to 10.38 billion euros in the first quarter. This is better than the forecasts of Bloomberg and Factset which were “content” with 9.8 billion and 9.7 billion euros.
All the divisions are growing, with an exceptional performance, in addition to the Consumer Products already mentioned, by Dermatological Beauty. The latter division “recorded exceptional growth” of +31% to 1.7 billion euros.
Geographically, growth was in double digits in every Zone except North Asia (+1.9% on a comparable basis), “due to a destocking of distribution in mainland China at the very beginning of the year”.
The other emerging zones, on the other hand, were very dynamic. The Sapmena-SSA zone (South Asia, Pacific, Middle East, North Africa, South Saharan Africa) jumped by 26.7% to 841 million euros and Latin America by +22.3% to 684.4 million euros. For their part, the mature zones did not stall, with an increase of +16% to 3.2 billion euros for Europe and +17% for North America to 2.6 billion euros.
“This performance, which has not yet benefited from the reopening of China, demonstrates the power of L’Oréal’s balanced multipolar model,” said Nicolas Hieronimus, the group’s CEO, in a statement.
Luxury driven by Perfumes
In more detail, the luxury division was driven by Perfumes, in particular those of Yves Saint Laurent and “its three major pillars Libre, Y and Black Opium”. But those of the couture brands, “in particular Valentino’s Born In Roma, Mugler’s Angel Elixir, Luna Rossa Ocean and Prada’s Paradoxe” also confirmed “their very strong potential”. In skin care, Helena Rubinstein and Takami also stood out.
Lastly, L’Oréal should continue to expand its presence in the luxury sector. On 3 April, the group announced the signing of an agreement with Natura &Co to acquire Aēsop, the Australian luxury cosmetics brand.
“Aware of the current uncertainties, we remain optimistic about the outlook for the beauty market, ambitious for the future and confident in our ability to outperform the market again and to achieve, in 2023, another year of growth in sales and results,” said Nicolas Hieronimus, the CEO.
Read also > Kering, l’Oréal and EssilorLuxottica: strong performances in the third quarter
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With a 15% increase in sales, L’Oréal did better than analysts’ forecasts in the first quarter. Its luxury division, weighed down by China at the beginning of the year, did less well than its consumer products, which are nonetheless part of a premiumisation trend.
L’Oréal continues to move upmarket and consolidate its position as the world’s number one beauty company.
In the first quarter of 2023, its luxury division, which had moved up to first place in 2021, fell back to second place behind its consumer products division (Elsève, Garnier, Maybelline, L’Oréal Paris, etc.).
With an increase in turnover of +6.5% on a like-for-like basis to 3.7 billion euros, the luxury sector did less well than the consumer sector (+16% to 3.8 billion euros in turnover).
But if the consumer division “outperforms the market”, it is also because it “benefits from its premiumisation strategy (with more expensive products) while continuing to grow significantly in volume” says the cosmetics and perfumes giant.
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With a 15% increase in sales, L’Oréal did better than analysts’ forecasts in the first quarter. Its luxury division, weighed down by China at the beginning of the year, did less well than its consumer products, which are nonetheless part of a premiumisation trend.
L’Oréal continues to move upmarket and consolidate its position as the world’s number one beauty company.
In the first quarter of 2023, its luxury division, which had moved up to first place in 2021, fell back to second place behind its consumer products division (Elsève, Garnier, Maybelline, L’Oréal Paris, etc.).
With an increase in turnover of +6.5% on a like-for-like basis to 3.7 billion euros, the luxury sector did less well than the consumer sector (+16% to 3.8 billion euros in turnover).
But if the consumer division “outperforms the market”, it is also because it “benefits from its premiumisation strategy (with more expensive products) while continuing to grow significantly in volume” says the cosmetics and perfumes giant.
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