Strong demand for luxury products, particularly in Asia, has seen first-quarter sales grow 7.5 per cent for French cosmetics company L’Oreal.
Organic growth was particularly strong for L’Oreal Luxe, rising 12.1 per cent to reach €7.04 billion (US$7.5 billion) in sales.
Chairman/CEO Jean-Paul Agon says the company experienced quite differentiated performances by division with extraordinary trading early in the year.
“The cosmetics market unexpectedly proved extremely atypical in the first weeks of the year, with very strong consumption of luxury products, especially in Asia, and, on the contrary, a very slow start for consumption in the mass market and the professional market,” he says. “The market seems to have become steadier and is returning to a more usual profile.”
In this context, the group delivered a good first quarter, up by 7.5 per cent based on reported figures and up 4.2 per cent like-for-like. New markets, especially Asia, delivered a solid performance.
L’Oreal Luxe’s outstanding start to the year was driven by make-up sales, which rose 12.2 per cent like-for-like and 17.8 per cent based on reported figures. This was helped by the success of new fragrance Mon Paris in Asia. Sales in China were particularly good, says the company.
There was double-digit growth in Asia for SkinCeuticals in the company’s active cosmetics division, boosted by the success of the new H.A. Intensifier.
The Asia Pacific zone has grown by 7.1 per cent like-for-like and 8.9 per cent on reported figures. Hong Kong has returned to dynamic growth, thanks to L’Oreal Luxe and the performances of the Giorgio Armani, Lancome and Yves Saint Laurent brands. Growth remains dynamic in Australia, Indonesia and Thailand, where the consumer products division is finding success with the Garnier and NYX Professional Makeup brands.
Growth for The Body Shop was up 2.3 per cent like-for-like but down 1.4 per cent on reported figures. Indonesia grew robustly while Hong Kong showed signs of recovery.
On February 9, the group announced it would explore strategic options regarding The Body Shop’s ownership.
L’Oreal also acquired skincare company CeraVe to complement its Active Cosmetics brand portfolio in the strongly expanding segment of accessible dermocosmetics.
Meanwhile, the group is continuing to accelerate its digital offering, both in marketing and in e-commerce, which posted 27 per cent growth during the quarter and accounted for 6.8 per cent of total sales.
“In an environment that remains volatile, our well-balanced business model is now more than ever an asset,” says Agon.