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PARIS — L’Oréal said Thursday that first-quarter sales gained 5.1 percent, driven partially by business from its consumer products, luxe and active cosmetics divisions. The French beauty giant also confirmed guidance for 2013.
This story first appeared in the April 19, 2013 issue of WWD. Subscribe Today.
Company revenues in the three months ended March 31 were 5.93 billion euros, or $7.83 billion at average exchange for the period. On a like-for-like basis, they grew 5.5 percent and, excluding currency fluctuations, revenues advanced 6.5 percent.
The results beat analysts’ estimates.
“Even though [L’Oréal’s] growth remained below double digits, New Markets — up 9.4 percent — saw its biggest growth in a year and second-best growth in two years,” stated initial perspectives published by Andrew Wood, an analyst at Sanford C. Bernstein & Co. “Even Western Europe and North America slightly outperformed expectations…and the total was dragged down by disappointing sales at The Body Shop and surprisingly negative sales in Dermatology, under pressure from generics in Europe and other factors. Within cosmetics, professional was noteworthy for the lack of growth…but consumer, luxe and active more than compensated.”
L’Oréal’s luxe division registered sales of 1.42 billion euros, or $1.88 billion, up 8.1 percent. Revenues from active cosmetics gained 6.2 percent to 497.6 million euros, or $657.2 million. Consumer products’ sales rose 5.5 percent to 2.92 billion euros, or $3.86 billion, while professional products’ revenues declined 0.4 percent to 752.6 million euros, or $994 million.
The Body Shop posted revenues of 181.9 million euros, or $240.3 million, a 0.8 percent gain. And L’Oréal’s Dermatology branch generated sales of 156.7 million euros, or $207 million, a 2.1 percent rise.
Business in North America advanced 8.5 percent to 1.37 billion euros, or $1.81 billion. New markets’ revenues grew 6.7 percent to 2.23 billion euros, or $2.95 billion. Sales in Western Europe increased 1.9 percent to 1.99 billion euros, or $2.63 billion.
“We are off to a very solid start,” said Jean-Paul Agon, L’Oréal chairman and chief executive officer, during a conference call with financial analysts and journalists on Thursday evening. “And we think that we should have again a solid year.”
He said L’Oréal expects to outperform the beauty market and improve its results in 2013.
Agon also noted a slight deceleration in the worldwide business so far this year.
“It seems that the market is slowing down a little bit, so it’s maybe going to be more something like 4 percent [growth in 2013 rather] than 4.5 [percent in 2012],” he said, adding that doesn’t mean L’Oréal is losing velocity. “On the contrary, what we are seeing in this first quarter is really encouraging.… Slowing down of the market doesn’t mean slowing down for us.”