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L’Oréal announced yesterday the resumption of its sales growth in the third quarter of 2020. The French brand has been able to reach out to Chinese customers, and has continued to launch its products despite the health crisis.
During the first part of the year, L’Oréal suffered from global containment, which led to the closure of stores, airports and hair salons where the brand markets its products. As for many luxury brand, the health crisis led to a decline in growth for the beginning of 2020.
However, the Group’s sales rebounded in most of the brand’s divisions, and more particularly on consumer products available in supermarkets, such as the Garnier brand.
L’Oréal’s total revenue rose to just over 7 billion euros for the July-September period, up 1.6% on a comparable basis. This rebound in revenues, which had fallen by 19% in the April-June period, was quite unexpected since analysts predicted that revenues would contract again after June 2020.
L’Oréal is experiencing its most significant rebound in the active cosmetics division, with brands such as Vichy or La Roche Posay, which market dermatological products. The division jumped by nearly 30% of its sales. The brand’s CEO, Jean-Paul Agon, reported that L’Oréal had gained market share in this segment during a conference call with analysts.
The CEO also pointed out that L’Oréal had managed to outperform competing brands, particularly in the important Chinese market where it has a strong presence. Other luxury houses, such as Hermès and Louis Vuitton, reported a similar increase due to demand in Asia.
The luxury division of the brand, L’Oréal Luxe, which includes, for example, the Lancôme brand, which manufactures cosmetic products for the Italian brand Armani, did not experience such a recovery. Sales declined by 6.2% and the Group justified this negative performance by the travel restrictions imposed everywhere.
“The fact that Chinese consumers no longer travel is a shame for travel retail but a godsend for our business in China“, commented Jean-Paul Agon.
Jean-Paul Agon expressed his caution regarding the resurgence of the COVID-19 epidemic, particularly in Europe. However, he also stated that he expected a further increase in L’Oréal’s sales in the fourth quarter.
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Fearured photo : © L’Oréal[/vc_column_text][/vc_column][/vc_row]
