Business review: L’Oréal, P&G, Inter Parfums and Amyris release financials

25 Apr 2023 --- Cosmetic and personal care industry players have released their financial overviews, highlighting good growth amid cost and operating challenges. Emerging from challenging lockdowns, economic gains from the reopening of the Chinese market are apparent.

L’Oréal grows in all categories
L’Oréal reported its first quarter 2023 sales were off at a “very strong start,” recording growth of 13% at EUR 10.38 billion (US$11.4 billion), particularly thanks to sales in its Dermatological Beauty and Consumer Products segments.

The company highlights strong double-digit growth in every zone, except for North Asia due to a reduction of stock-in-trade in mainland China at the very beginning of the year.

Recording growth of 7.6% like-for-like at the end of March, the Professional Products division performed well in mainland China, India and the UK. Growth in the dynamic haircare market was primarily driven by Kérastase’s Symbiose anti-dandruff range and Série Expert by L’Oréal Professionnel’s Metal Detox.

L’Oréal highlights strong double-digit growth in every zone, except for North Asia due to a reduction of stock-in-trade in mainland China at the very beginning of the year (Image credit: L’Oréal).L’Oréal’s Consumer Products Division grew at 14.7%, where Makeup was the fastest growing category, with new launches including Telescopic Lift Mascara by L’Oréal Paris, Bare With Me Blur Tint foundation by NYX Professional Makeup and the “nude” extension of Maybelline New York’s lipstick Superstay Vinyl Ink.

In haircare, Elvive Bond Repair by L’Oréal Paris boosted the category. Skincare was also “very dynamic,” driven by the combined success of L’Oréal Paris’ new Revitalift Clinical Vitamin C Serum and Garnier’s new anti-acne innovations. Hair color achieved significant growth.

L’Oréal’s fragrance business in its Luxe division was driven by Yves Saint Laurent and its three main pillars Libre, Y and Black Opium. It was also boosted by Valentino’s Born In Roma, Mugler’s Angel Elixir and Prada’s Luna Rossa Ocean and Paradoxe. Meanwhile, Luxe skincare saw gains from Helena Rubinstein and Takami. The division also saw an acceleration in makeup in North America.

The company’s Dermatological Beauty division saw 30.6% like-for-like growth, growing significantly faster than the global dermocosmetics market, which continued to expand. La Roche-Posay, was the primary contributor to the Division’s growth, fueled by the breakthrough suncare innovation Anthelios UVmune 400 and the relaunch of Cicaplast, powered by microbiome science.

CeraVe continued its growth while SkinCeuticals accelerated and the recently acquired brand SkinBetter Science had an “excellent quarter.”

Other key developments at L’Oréal this year included the company’s agreement with Natura &Co to acquire Aēsop, an Australian luxury beauty brand, for US$25 billion.

“Mindful of the current uncertainties, we remain optimistic about the outlook for the beauty market, ambitious for the future and confident in our ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023,” comments Nicolas Hieronimus, CEO at L’Oréal.

P&G raises fiscal 2023 guidance
The Procter and Gamble Company (P&G) posted its third quarter fiscal year 2023 results with net sales of US$20.1 billion, an increase of 4% versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased 7%.

P&G posted its third quarter fiscal year 2023 results with net sales of US$20.1 billion, an increase of 4% versus the prior year (Image credit: P&G).Its Beauty segment experienced a 7% increase in organic sales compared to the previous year.

“Skin and Personal Care organic sales grew low single digits as higher pricing and innovation-based volume growth were partially offset by lower sales of SK-II in the travel retail channel. Hair Care organic sales increased double digits driven by increased pricing,” shares the comapny.

Compared to the prior year, the Grooming segment organic sales increased by 7%, Health Care segment organic sales increased by 9%, Fabric and Home Care segment organic sales increased by 9% and Baby, Feminine and Family Care segment organic sales increased by 6%.

“We delivered strong results in the third quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment,” says Jon Moeller, chairman of the board, president and CEO at P&G.

“Our team’s strong execution of our strategies and our progress through three quarters enable us to raise our fiscal year outlook for sales growth and cash return to shareowners and maintain our guidance range for EPS growth despite continued cost and foreign exchange headwinds.”

P&G raised its guidance for fiscal 2023 all-in sales to grow approximately 1% versus the prior fiscal year, from a prior guidance range of down 1% to in-line. The company also raised its outlook for organic sales growth to approximately 6% versus the prior fiscal year from a prior growth range of 4 to 5%.

Inter Parfums strengthens fragrance business
Inter Parfums announced that for the three months ended March 31, 2023, net sales rose to a record US$312 million, a 24% increase from US$251 million in the first quarter of 2022. The sales gains were primarily due to established lines.

“Net sales for the quarter ended March 31, 2023 were not only a first quarter record but were also the highest for any quarter in our history,” details Jean Madar, chairman and CEO at Inter Parfums.

“Our European operations grew sales by 26% in dollars or 29% in constant currency with our three largest brands generating exceptional growth. In dollars, Jimmy Choo, Montblanc and Coach sales rose 63%, 28% and 24%, respectively.”

Additionally, Madar outlines sales by several of the company’s mid-sized brands started the year “on a strong note,” most notably Karl Lagerfeld, Boucheron and Rochas, all of which achieved double-digit sales growth.

Inter Parfums announced that for the three months ended March 31, 2023, net sales rose to a record US$312 million.Meanwhile, Inter Parfums’ European operations launched a number of brand extensions, including Jimmy Choo Blossom, Eau de Rochas Citron Soleil, Montblanc Signature Absolue and Kate Spade Chérie.

“Our US operations also had a strong start growing 19% off a high 2022 base when first quarter sales had expanded 77%,” Madar continues. “This increase was driven by the addition and extension of Donna Karan and DKNY to our portfolio and double-digit growth for Ferragamo and Oscar de la Renta, following successful brand extensions.”

Additionally, the company introduced brand extensions within established lines for Abercrombie & Fitch and MCM. After the challenging lockdowns, the progressive reopening of China buoyed the Ferragamo and Anna Sui brands.

“As expected, the ERP implementation weighed on our quarterly results, impacting Guess disproportionately which was flat off a high base in 2022, but we have strong orders that we will be fulfilling during the second quarter,” says Madar.

“We are strengthening our position within the fragrance industry overall and especially within the designer/prestige category. As we announced late last year, the Lacoste fragrance business will be directed and operated by our Paris operations come January 2024.”

Michel Atwood, Inter Parfums’ chief financial officer flags that the company continues to experience logjams in procuring certain components, but is benefitting from the ongoing strength of the worldwide selective fragrance market in which Inter Parfums is also gaining market share “with sizable demand both for our key brands and our new licenses.”

“We also see solid opportunities stemming from the reopening of China, particularly in the second half of the year,” he adds. “With first quarter sales further exceeding our expectations, we are raising our 2023 guidance calling for net sales of US$1.25 billion up from US$1.2 billion.”

“Our current 2023 guidance assumes that the average dollar/euro average exchange rate remains at current levels and there is no significant resurgence of the COVID-19 pandemic.”

Amyris plans strategic cost reduction
Synthetic biotechnology company Amyris – a proponent of sustainable consumption through its Lab-to-Market technology platform and clean beauty consumer brands – expects to deliver Q1 2023 total revenue of approximately US$56 million. 

The company previously issued an approximation of US$50 million during the fourth quarter earnings call. Gross profit and operating expense are expected to be “sequentially significantly better compared to Q4 2022.”

Amyris is in process of a strategic review of all aspects of its cost structure, with the objective to accelerate cost and efficiency improvements.

The company progressed insourcing production of its ingredients at Barra Bonita, its advanced biomanufacturing facility. “Critical issues from the commissioning and start-up phase have been addressed and the plant is delivering product at target,” it reports.

“We are pleased with the start of the year and are focused on operating with a more efficient cost base while continuing to deliver strong revenue growth,” commented John Melo, president and CEO.

“Our strategy to focus our portfolio, reduce our cost base, expand our strategic partnerships and to divest non-core assets is designed to self-fund our business operations. Our liquidity plan includes significant cost savings, attaining the estimated US$335 million of earnouts and milestone payments over the next three years from current strategic agreements and executing on an estimated US$200 million from additional transactions this year.”

In other financial news covered on PersonalCareInsights, LVMH and Givaudan posted successful first quarter results as BASF sales took a hit.

By Benjamin Ferrer