L’Oréal reports US$27B sales, highlights public health and inflation setbacks

21 Oct 2022 --- L’Oréal is reporting strong growth, with sales of €27.94 billion (US$27.16 billion) achieved by the end of September. Within the company’s divisions, sales in the Professional Products category were reported at a 10.9% growth. In Consumer Products, the company recorded growth of 8.7% like-for-like (LFL) basis, while L’Oréal Luxe and Active Cosmetics achieved 22% and 31.5% growth, respectively.

“In a context of unprecedented volatility, marked by the public health restrictions in China and inflation in the Western world, L’Oréal achieved an excellent quarter, continuing at a steady pace of growth compared to 2019,” says Nicolas Hieronimus, CEO at L’Oréal.

“Benefiting from its rebalancing strategy, particularly in geographic footprint, at the end of September, the Group reported strong growth of 20.5%, with a significant positive impact of foreign exchange and 12.0% LFL.”

Hieronimus explains that the global beauty market remains dynamic and consumers’ appetite for beauty products is intact.

“The combination of a robust business model and agility allowed L’Oréal to outperform the market.”

Due to Skinceuticals and professional haircare with Kérastase and L’Oréal Professionnel, the Professional Products Divisions saw double-digit growth.Regarding performance across geographic regions, the company achieved a 13.7% reported growth in Europe, 25% in North America and 17.5% in North Asia.

Performance within the geographic footprint
The figures show a rebalance in the Group’s geographic footprint, observes Hieronimus.

“All zones made progress, including North Asia, despite the turbulence in the Chinese ecosystem. The other zones achieved double-digit growth, with a significant leap in emerging markets (Latin America) and remarkable European performance.”

The beauty industry kept growing over the summer and L’Oréal saw strong growth in its key markets, improving its position in most nations, especially Germany, Spain and the UK. L’Oréal has valued its product line in an era of growing inflation by leveraging the appeal of its brands.

The Consumer Products Division had impressive results in skincare, haircare and makeup. CeraVe, whose blemish management line has made an outstanding debut, and La Roche-Posay, drove the Active Cosmetics Division to outperform the dermo-cosmetics market. 

The dynamic fragrance brand portfolio of L’Oréal Luxe paid off, with Paradoxe by Prada and Armani Code off to a great start. The Professional Products Division took advantage of its position in e-commerce and a buoyant premium haircare market. The division was also fueled by Skinceuticals and professional haircare with Kérastase and L'Oréal Professionnel.

The Active Cosmetics Division outperformed the dermo-cosmetics market, fueled by La Roche-Posay and CeraVe.“Growth is also balanced across divisions, each of which outperformed its market. The Consumer Products Division has continued to accelerate since the beginning of the year and our three selective divisions recorded double-digit growth over the first nine months,” Hieronimus adds.

L’Oréal Luxe “outperforms” beauty market
By September, L’Oréal Luxe reportedly outperformed the global luxury beauty market with 22% growth. 

However, the division suffered losses in the third quarter due to multiple lockdowns in China and Hainan during the summer, expected billing related to the move of the Asian Travel Retail business unit in the second quarter, and issues with sourcing (fragrance bottles in particular). Despite these setbacks, the division continued to advance in mainland China, reaching record market share there.

“Several factors temporarily impacted the performance of L’Oréal Luxe in the third quarter. Nevertheless, the division reaccelerated in September and reached record market share in mainland China in the third quarter,” says Hieronimus.

The Group is benefiting from its valorization strategy, rolled out at the start of the year, the effects of which are accelerating, particularly in Europe and North America, he explains. 

“In line with our dual ambition of achieving economic and societal excellence, we are glad to have been awarded the Platinum medal by EcoVadis, which ranked L’Oréal in the world’s top 1% of best companies in terms of environmental and social performance. Our efforts were also recognized by Refinitiv, with L’Oréal again included in its global Diversity & Inclusion Top 100.”

In future outlooks, Hieronimus says: “Despite the current uncertainties, we remain confident in the outlook for the global beauty market, which has again confirmed its resilience; confident in our power to innovate; and confident in our ability to outperform the market and achieve another year of growth in sales and profits in 2022.”

By Nicole Kerr