L’Oréal sees growth in dermatological beauty and slowdown in China
31 Jul 2024 --- L’Oréal gains €22.12 billion (US$23.94 billion) in sales due to “positive momentum in all divisions,” with Dermatological Beauty and Consumer Products leading the way. Net profit increased by 8.8% to €3.65 billion (US$3.95 billion) so far this year. However, China’s “depressed market” led to low single-digit growth.
The cosmetics conglomerate achieved +7.3% like-for-like and +7.5% reported as a result of “continued outperformance of the global beauty market.”
“In the first half, we delivered strong growth of +7.3%, well-balanced between value and volume and strengthened our global leadership in a beauty market that remains dynamic,” says Nicolas Hieronimus, CEO of L’Oréal.
Professional and consumer product growth
L’Oréal accomplished double-digit growth in Europe and “emerging markets” while maintaining its success in North America throughout the year’s first half. The increase was driven by a “combination of value and volume,” with progress being balanced between offline and online sales.
“Our continued strong momentum in emerging markets, Europe and North America allowed us to more than offset the depressed beauty market in mainland China and the unfavorable comparative in Travel Retail,” says Hieronimus.
Dermatological Beauty reported growth of 16.4% like-for-like and 15.5% reported. The division grew “significantly faster” than the dermo-cosmetics market, which apparently slowed down in the US.
The Professional Products Division delivered growth of 5.7% like-for-like and 4.9% reported.
The sector grew across all regions in developed markets such as North Asia and “outpaced the global professional market.”
“I am particularly pleased to see the acceleration of L’Oréal Luxe, the dynamism of Consumer Products and the continued share gains of Dermatological Beauty and Professional Products,” says Hieronimus.
The division expanded through its omnichannel strategy with acceleration in e-commerce and selective distribution.
The Consumer Products Division achieved growth of 8.9% like-for-like and 8.3% reported. L’Oréal says the division’s first-half performance reinforced its democratization and premiumization strategy. Growth was driven by particularly “strong performances” in Europe and emerging markets, notably Brazil, Mexico and India.
“In an environment that continues to be marked by economic and geopolitical tensions, we remain optimistic about the outlook for the beauty market and confident that our innovation power and the robustness of our multi-polar model will allow us to keep outperforming it and to achieve another year of growth in sales and profit.”
