L’ORÉAL: CHINESE AND AMERICAN CUSTOMER APPETITE DRIVES FOURTH QUARTER SALES
PARIS (Reuters) – L’Oréal, the world’s leading cosmetics group, announced on Wednesday better-than-expected growth in sales in the fourth quarter, supported in particular by the enthusiasm of its Chinese and American customers for beauty products during the Christmas and New Year.
The French group, which notably owns the Lancôme brand, recorded an 11.2% increase in sales over the October-December period, to 9.09 billion euros, with particularly rapid growth in North America.
Analysts polled by Refinitiv expected sales of 8.74 billion euros.
“L’Oréal fired all the guns in 2021,” said chief executive Nicolas Hieronimus, while stressing that the group outperformed a market that had almost returned to its pre-coronavirus pandemic level.
Sales of the French cosmetics giant increased by 11.3% compared to 2019, before the health crisis.
Online shopping grew during the quarter to account for nearly a third of sales, as traditional channels suffered disruption due to intermittent lockdowns in China and a spike in infections linked to the Omicron variant of the coronavirus in the United States.
L’Oreal, which has shifted its resources to take advantage of digital channels, also announced record sales on Tmall, the platform of Chinese e-commerce group Alibaba, during Singles’ Day last November.
In North America, L’Oreal gained market share across all divisions in 2021 and benefited particularly from the success of its new Sky High mascara from Maybelline and Ralph’s Club fragrance from Ralph Lauren, the group said.
Advertising spending, which is closely watched by investors, rose slightly in the second half, resulting in an operating margin of 19.1%, slightly below the consensus of Credit Suisse analysts.
For 2022, the owner of brands like Kiehl’s and Vichy says he is confident in his ability to outperform the market and achieve further revenue growth.
(Report Mimosa Spencer and Piotr Lipinski; French version Diana Mandiá)