PARIS (Reuters) – L’Oréal fell sharply on the stock market on Friday due to sales considered disappointing in Asia, its “travel retail” activity (sales to travelers) continuing to feel the effects of new regulations on the parallel market of resale in China.
On the Paris Stock Exchange, around 08:10 GMT, the stock plunged 6.06% to 425.65 euros compared to a decline of 0.1% for the CAC 40.
L’Oréal reported on Thursday a 6.9% increase in its sales to 10.61 billion euros in the fourth quarter, an increase certainly but slower than in the previous quarter.
This figure is also slightly below expectations at 10.9 billion euros, according to estimates cited by Barclays.
The French group’s travel sales activities, particularly in Hainan and South Korea, have been penalized by the Chinese government’s repression of the parallel resale market, called Daigou.
Resellers buy inventory at lower prices from other markets in order to resell it on the continent.
“North Asia and the luxury (segment) were well below expectations and we believe that the headwinds in China are structural and not just cyclical,” Deutsche Bank wrote in a note.
(Writing by Claude Chendjou, edited by Kate Entringer)
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