Beauty and personal care giants L’Oréal and P&G report strong sales growth across segments
20 Oct 2023 --- In recent financial reports, L’Oréal has achieved €30.57 billion (US$32.4 billion), up 12.6% like-for-like (LFL) in the first nine months of the year, with double-digit growth across categories while its Travel Retail Asia performance lags. Meanwhile, Procter & Gamble (P&G) has reported Q1 FY2024 net sales of US$21.9 billion, an increase of 6% versus the prior year.
“We delivered very strong results in the first quarter of the fiscal year 2024, putting us on track to deliver toward the higher end of our fiscal year guidance ranges for organic sales and core EPS growth,” says Jon Moeller, chairman of the Board, president and CEO at P&G.
“We remain committed to our integrated strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organization.”
“The P&G team’s execution of this strategy has enabled us to sustain strong momentum. We have confidence this remains the right strategy to deliver balanced growth and value creation,” he continues.
On L’Oréal’s performance, CEO Nicolas Hieronimus adds: “The beauty market remains exceptionally dynamic, and L’Oréal continues to outperform and reinforce its global leadership. Despite the slower than expected recovery of the beauty market in mainland China and the reset in Asian Travel Retail, L’Oréal kept its double-digit pace.”
“We did so thanks to our broad-based regional footprint, successful innovation pipeline and agility to rapidly allocate investment to the areas where we see the highest growth. In a context of continued economic and geopolitical uncertainty, we remain confident in our ability to keep outperforming the market and achieve in 2023 another year of growth in sales and profits. We are optimistic about the outlook for the beauty market.”
Professional Products: Delivering growth
The Professional Products Division exhibited results with a growth of +8% LFL. A notable increase was observed in mainland China, India and the US.
L’Oréal’s performance In North Asia grew +1.3% LFL and declined -4.1% reported, due to changes in Travel Retail.
Consumer demand for premium hair care products remained strong, contributing to the success of Kérastase, one of the division’s brands. The division’s other brands and innovative products fueled its growth in the hair care market. These include the revamped Nutritive range from Kérastase, Shades EQ from Redken and promising Absolut Repair Molecular and Iona from L’Oréal Professionnel.
The division’s strategic implementation of its omnichannel approach has resulted in growth across various distribution channels, including salons, the SalonCentric network in North America, e-commerce and the selective channel.
Consumer Products: Record-breaking performance
The Consumer Products division recorded its best nine months, with growth of +14.5% LFL. The division achieved balanced growth between offline and online channels and between value and volume.
Notable growth contributors included Europe, “where momentum remained spectacular,” and emerging markets in Mexico, Brazil and India.
“Disruptive” innovations and product launches led to double-digit growth across major brands and categories. Makeup received a significant boost from new product releases like Falsies Surreal Mascara by Maybelline New York and Infallible Matte Resistance lipstick by L’Oréal Paris. Fat Oil Gloss by NYX Professional Makeup was a fruitful collaboration with Barbie the Movie.
The skin care category was led by Garnier and L’Oréal Paris, while the hair category was propelled with launches of Elvive Bond Repair in care and Garnier Good in color.
Luxe division: Travel Retail Asia challenges
L’Oréal Luxe achieved growth of +6.1% LFL. The division experienced double-digit growth across regions in the third quarter, except for Travel Retail Asia, influenced by policy changes regarding daigou, a market where products are resold for profit.
Fragrance was a “standout performer,” driven by Prada, Valentino, Yves Saint Laurent (YSL) and Lancôme. Recent launches like YSL men’s fragrance Myself saw a strong start. Skincare remained strong, with Helena Rubinstein and new products like Clarifique Double Essence and Rénergie HPN 300-Peptide Cream by Lancôme.
Dermatological Beauty: “Outstanding growth”
L’Oréal Dermatological Beauty experienced exceptional growth of +28.7% LFL. The division had an “outstanding performance” across regions, including emerging and mature markets.
P&G’s Skin and Personal Care organic sales experienced growth in the single digits, offset primarily by lower SK-II sales.
La Roche-Posay’s Effaclar, Cicaplast and UVmune 400 played a pivotal role, supported by CeraVe and Skinbetter Science. Vichy saw acceleration, driven by the Dercos hair care franchise.
A €57 million (US$60.4 million) insurance benefit following a natural disaster at the Vichy plant, which disrupted operations, was included in third-quarter sales.
Regional performance
Europe witnessed a growth of +17.6% LFL. The “spectacular” growth was experienced across countries, with notable momentum in several clusters and regions — Germany-Austria-Switzerland and Spain-Portugal clusters, the UK, the Nordic countries and Eastern Europe.
North America demonstrated a growth of +12.6% LFL, driven by successful innovations. The US, in particular, experienced strong growth across divisions, with makeup and premium hair care leading the way.
“L’Oréal Luxe continued to outperform the market in fragrances, driven by Couture brands like Valentino and YSL, with the recently launched Myslf off to a great start. In makeup, YSL and Armani delivered strong growth, boosted by innovations,” shares the company.
Moving to North Asia, the region grew +1.3% LFL and declined -4.1% reported, impacted by changes in Travel Retail.
“L’Oréal Luxe continued to significantly outperform the market, particularly in premium skin care, thanks to the success of Helena Rubinstein and Takami. Couture brands like YSL and the recently launched Prada Beauty also contributed,” adds L’Oréal.
Also, SAPMENA-SSA (South Asia Pacific, Middle East, North Africa, Sub-Saharan Africa) regions achieved +23.6% LFL. The skin care category was key in this growth, driven by volume and value. L’Oréal Dermatological Beauty with CeraVe led the way, and makeup recovered to pre-pandemic levels.
Latin America achieved +24.4% like-for-like, benefitting from the success of recent innovations and a diverse brand portfolio, responding effectively to the region’s consumers.
Beauty segment delivers organic sales growth
In P&G’s beauty segment, three months ended September, organic sales exhibited a US$4 billion and a 5% increase in organic sales compared to the previous year. Skin and Personal Care organic sales experienced growth in the single digits, with higher pricing and innovative products driving volume growth, especially in hair care. However, “unfavorable mix” dynamics partially offset this, primarily stemming from lower SK-II sales.
P&G has reported Q1 FY2024 net sales of US$21.9 billion.
The Hair Care category had sales growth in the high single digits, mainly driven by increased pricing. The Grooming segment also achieved an organic sales increase of 9% compared to the previous year. This growth was supported by higher pricing and a favorable product mix, although pricing-related volume declines partially offset it.
Home care and other divisions
The Fabric and Home Care segment witnessed a surge in organic sales, with a 9% increase compared to the previous year. Organic sales in Fabric Care grew in single digits due to increased pricing and a favorable product mix but were partially offset by volume declines, primarily in the Asian market.
In the Home Care category, organic sales experienced growth in the low teens.
The Baby, Feminine, and Family Care segment showcased organic sales growth of 7% compared to the previous year. Organic sales grew in the mid-single digits within the Baby Care category, driven by increased pricing and a favorable product mix.
The Feminine Care category reported organic sales growth in the high single digits, driven by increased pricing and a favorable mix of geographic and product offerings. The Family Care category reported organic sales growth in the mid-single digits, primarily due to increased pricing.
Edited by Venya Patel
