PARIS (Reuters) – French cosmetics giant L’Oréal announced on Tuesday a 3.4% increase in its sales in the third quarter, marked by the deterioration of its turnover in China.
Owner among others of the Maybelline and Lancôme brands, L’Oréal indicated that its sales over the three months running until the end of September amounted to 10.28 billion euros, representing organic growth of 3.4%.
This amount is lower than expected: a Visible Alpha consensus cited by Jefferies targeted 6%.
In its press release published Thursday, L’Oréal highlighted the evolution of its turnover over the first nine months of the year, describing it as “solid growth of 6% despite the turbulence”.
In North Asia, a region dominated by the Chinese market and representing around a quarter of L’Oréal’s sales, the group’s turnover suffered a fall of 6.5% in the third quarter on a comparable basis, compared to a decline of 2.4% in the previous quarter.
“The situation in the Chinese ecosystem is still more difficult, but we believe in the future of this market and hope that the government’s stimulus will help improve consumer confidence,” said the group’s general director, Nicolas Hieronimus, in the press release.
L’Oréal shares have fallen 20% since June, causing around 50 billion euros of its market capitalization to evaporate. Investors are indeed worried about low consumption in China.
China experienced its slowest growth since the start of 2023 in the third quarter, according to data published Friday by the Chinese public agency in charge of statistics.
The world’s largest luxury group, LVMH, said last week that consumer morale in the country was at an all-time low.
In addition to LVMH, last week, the Franco-Italian manufacturer of Ray-Ban, EssilorLuxottica, as well as the Italian brand Salvatore Ferragamo also attributed their weaker performance in the third quarter to the general slowdown in consumption in China.
In Europe, L’Oréal’s main market with around a third of sales, growth slowed in the third quarter, with a 5.6% increase in turnover compared to 9.7% in the previous quarter.
(Written by Florence Loève and Dominique Patton)
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