PARIS (Reuters) – L’Oréal reported on Thursday organic growth of 11.1% in its turnover in the third quarter, driven by Europe and the United States, but below expectations in due to a decline in sales in North Asia.

The group, which owns consumer brands like Maybelline and other more high-end brands like Lancôme, achieved a turnover of 10 billion euros in the third quarter, up 11.1% on a like-for-like basis.

This result is slightly below the expectations of analysts who expected organic sales growth of 11.5%, according to the consensus cited by Barclays.

In North Asia, mainly represented by mainland China, L’Oréal reported quarterly turnover of 2.06 billion euros, a decrease of 4.8% on a like-for-like basis. Analysts expected organic growth of 14.4% for this region.

This decline is explained, according to the company, by the impact on its “travel retail” activity of policy changes concerning the parallel resale market called Daigou.

In mainland China, where the recovery of the beauty market is “slower than expected”, L’Oréal reported sales up 7.7% like-for-like during the first nine months and said it continued to gain market share.

China, where high youth unemployment and a housing crisis have complicated the country’s post-pandemic rebound, is the focus of investors’ concerns.

L’Oréal, which last year was the leader in China’s $78.9 billion beauty and personal care market, has been gaining market share in that country in recent months . Its “luxury” division is the market leader in high-end cosmetics.

In Europe and North America, L’Oréal exceeded expectations for the third quarter, with like-for-like growth of 16.2% and 11.8%, respectively.

Growth in L’Oréal’s luxury division slowed to +3.2%, confirming that consumers are reducing their purchases of high-end products.

“We continue to believe like-for-like estimates are too high as signs of decline in the category accumulate,” Jefferies said, referring to L’Oréal’s luxury division.

(Report by Mimosa Spencer, written by Kate Entringer, edited by Blandine Hénault)

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