The French cosmetics giant, renowned for brands like Maybelline and Lancôme, announced a robust sales performance of 11.24 billion euros ($11.98 billion) for the first quarter ending in March.
This sales growth surpassed analyst expectations, with a reported 8.3 percent increase, outpacing the projected 6.1 percent rise.
L’Oréal attributed this growth to strong sales in both North America and Europe, where its mass-market products and dermatological offerings offset declines in luxury segments.
Analysts at Jefferies commented on the resilience of the Western markets, particularly North America, despite concerns raised by US retailer Ulta Beauty earlier about a potential slowdown.
Following the release of the results, L’Oréal’s American depositary receipts (ADRs) surged up to 6.5 percent in New York trading, with US rivals Estée Lauder and Coty also experiencing gains.
In terms of product divisions, L’Oréal highlighted strong performance in its consumer products segment, driven by increased demand in Europe and emerging markets.
The dermatological beauty unit, focusing on brands like La Roche-Posay and Cerave, experienced rapid growth of 21.9 percent, buoyed by medical recommendations.
Luxury division sales, which include fragrances such as YSL’s Libre, surpassed expectations with a 1.8 percent increase, driven by robust growth in Europe and North America, offsetting weaker performance in North Asia.
L’Oréal acknowledged challenges in North Asia, particularly in travel retail, due to a Chinese government crackdown on resellers of foreign consumer products, known as “daigou.”
However, the company’s Chief Executive Nicolas Hieronimus emphasized L’Oréal’s outperformance compared to the broader market, particularly in China, where they achieved a growth rate of 6.2 percent, significantly higher than the market average.
Despite these challenges, L’Oréal maintains its position as a market leader in luxury beauty, with its shares showing resilience amid market fluctuations, positioning it as one of Europe’s most valuable listed companies.
