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PARIS — On the back of strong second-quarter revenues, L’Oréal reiterated its intent to outperform the overall cosmetics market in 2012 and achieve another year of sales and profit growth.
This story first appeared in the July 27, 2012 issue of WWD. Subscribe Today.
The French beauty giant said Thursday that its revenues in the three months ended June 30 increased 11.6 percent to 5.57 billion euros, or $7.16 billion at average exchange, spurred by its business in North America and new markets. Sales in those regions were up 22.7 percent and 14.4 percent, respectively.
On a like-for-like basis, company revenues rose 5.7 percent in the period.
During the first half, L’Oréal posted sales of 11.21 billion euros, or $14.55 billion, a 10.5 percent gain. In comparable terms, they climbed 6 percent.
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“We really think that this year is off to a solid start,” said Jean-Paul Agon, L’Oréal chairman and chief executive officer, during a conference call with financial analysts Thursday night. “All divisions are contributing to this overall satisfactory performance.”
The company’s Luxe Division’s strength was highlighted, despite its deceleration between the first and second quarters (when organic growth was 12.2 percent versus 8.7 percent). On a reported basis, the division’s sales increased 17.9 percent to 2.65 billion euros, or $3.44 billion, during the six months.
Agon cited among the division’s business drivers Lancôme, with revenues up in the double digits; Kiehl’s, with a 27 percent sales gain, and Ralph Lauren, which posted a 29 percent revenue uptick.
“We estimate that the growth of the luxury beauty market for the first quarter was around 8 percent and probably around between 5 and 6 [percent] for the second quarter,” he explained, adding that, although there was a slowdown, “the market didn’t stop.”
Agon said L’Oréal’s Active Cosmetics Division — where revenues climbed 6.6 percent to 850.7 million euros, or $1.1 billion — has been improving growth.
The company’s new markets zone, including the Asia-Pacific region, Eastern Europe, Latin America and the Africa and Middle East area, was the company’s largest, with sales of 4.06 billion euros, or $5.27 billion, a 14.2 percent rise. Revenues in Western Europe increased 1.9 percent to 3.84 billion euros, or $4.98 billion, while North American sales gained 17.8 percent to 2.57 billion euros, or $3.34 billion.
Overall, L’Oréal estimates the worldwide cosmetics market will be up by about 4 percent in 2012.
“We confirm our ambition and determination to outperform the market again this year, and…to achieve another year of solid growth both in sales and in earnings,” said Agon.