L’Oreal Sales Gain 8.4 Percent in First Quarter

French beauty giant L'Oreal posted first-quarter 2007 sales of 4.27 billion euros, or $5.6 billion at average exchange, up 8.4 percent year-on-year.

PARIS — French beauty giant L’Oréal posted first-quarter 2007 sales of 4.27 billion euros, or $5.6 billion at average exchange, up 8.4 percent year-on-year.

On a like-for-like basis in the quarter ended March 31, revenues rose 7.9 percent, and excluding The Body Shop business, gained 8 percent.

“The first-quarter sales figures are encouraging, even if they cannot be considered to be an indication of overall annual performance,” Jean-Paul Agon, L’Oréal’s chief executive officer, said in a statement. “The group’s growth is progressing as we had announced: Western Europe remains solid, North America is progressively returning to growth and the new markets have made a good start to the year.”

By geographic zone, L’Oréal’s business gained 13.7 percent, to 1.15 billion euros, or $1.5 billion, in the “rest of the world” segment, and 3.8 percent, to 1.92 billion euros, or $2.5 billion, in Western Europe. L’Oréal’s sales declined 5 percent, to 963 million euros, or $1.26 billion, in North America.

“All the divisions contributed equally to this dynamic performance,” continued Agon, in the statement.

L’Oréal’s overall cosmetics business increased 4.1 percent, to 4.03 billion euros, or $5.28 billion, in the period. Within that division, active cosmetics’ sales reached 393 million euros, or $515 million, up 9.3 percent; consumer products’ sales hit 2.15 billion euros, or $2.81 billion, up 4.2 percent; professional products’ sales came in at 542 million euros, or $710.3 million, up 3.6 percent, and luxury products generated 928 million euros, or $1.22 billion, up 2.7 percent.

The dermatology division, in which L’Oréal owns a 50 percent stake (and Nestlé the other 50 percent), rang up sales of 69 million euros, or $90.4 million, a 4.3 percent increase in the quarter. On a like-for-like basis, The Body Shop’s sales rose 6.4 percent to 169 million euros, or $221.5 million.

L’Oréal said the net impact of consolidation, largely due to the purchases of The Body Shop and Sanoflore, which were incorporated into the company in July and October, respectively, resulted in a sales increase of 4.6 percent.

Currency fluctuations hurt L’Oréal’s first-quarter sales by 4.1 percent. Excluding the impact of the exchange rate, L’Oréal’s sales gained 12.5 percent.

This story first appeared in the April 18, 2007 issue of WWD.  Subscribe Today.

“Currency fluctuations had a strong negative impact on the first quarter, and their effect will be felt, if less severely, throughout the year,” said Agon, in the statement. “This good start to the year confirms that we can be confident in meeting the target we have set ourselves, to return to a growth bracket of 6 percent to 8 percent like-for-like for 2007.”