Asian demand for luxury cosmetics powers L’Oreal sales growth

Asian demand for luxury cosmetics continued to drive performance at L’Oréal during 2019, and helped the French cosmetics company beat analyst consensus during the first three months of the year.

L’Oréal said on Tuesday after market close that stripping out the impact of currency movements and acquisitions, sales surged 7.7 per cent to €7.55bn during the first quarter. This was ahead of the 6.6 per cent comparable sales growth forecast in an Infront Data poll of analysts for Reuters.

Jean-Paul Agon, chairman and chief executive of L’Oréal, said in a statement: “As anticipated, the powerful underlying growth drivers remain the same as in 2018; luxe and active cosmetics, skincare, Asia, e-commerce and travel retail. Furthermore, the performance by division and zone remains contrasted in a market itself very contrasted.”

L’Oréal’s luxury division, home to brands such as Lancôme and Giorgio Armani, was the best-performing of its four divisions and surged 14.2 per cent on a like-for-like basis, ahead of active cosmetics (+13 per cent), consumer products (+3.3 per cent) and professional products (+2.2 per cent).

Geographical performance was led by new markets, notably Asia-Pafic, which gained 23.2 per cent on a like-for-like basis. Growth was subdued in western Europe (+1.1 per cent) and North America (+1.2 per cent).

E-commerce grew by 43.7 per cent.

Mr Agon added: “Despite a volatile, uncertain and contrasted economic environment, this positive start to the year gives us confidence in our capacity to outperform the market in 2019 and see another year of growth in sales and profits.”