PARIS — L’Oréal reported its first-half sales fell 3.2 percent to $8.1 billion, but the firm remains bullish about its yearend prospects based on expectations of moderating exchange rates and sustained organic sales growth.

The firm said it expects yearend net income, excluding extraordinary items, to grow at a double-digit pace.

On a like-for-like basis, eliminating noncomparable operations and the effect of exchange rates, sales rose 7.1 percent. Dollar figures are converted from the euro at current exchange. L’Oréal reported consolidated sales of 7.14 billion euros for the six months ended June 30.

Lindsay Owen-Jones, chairman and chief executive officer, commented in a statement, “Thanks to these extremely encouraging figures, obtained in the most difficult conditions, L’Oréal should be able to achieve its traditional objective of like-for-like sales growth of between 7 percent and 9 percent per annum.”

Through the end of June, currency fluctuations had a negative impact on L’Oréal’s consolidated sales of 10.5 percent and through the end of March, a negative impact of 11.7 percent. The company expects a gradual reduction in the effect of currency fluctuation during the second half of the year.

All divisions achieved sales increases in line with those of the first half of 2002, except for the luxury unit, “where the impact of the economic environment was felt more strongly,” the firm said. Excluding the effects of currency fluctuation and consolidation, consumer products sales were up 9.3 percent, to $4.48 billion, or 3.95 billion euros; luxury products were up 0.2 percent, to $1.79 billion, or 1.58 billion euros; professional products were up 8.8 percent to $1.11 billion, or 979 million euros, and active cosmetics were up 10.9 percent to $486.4 million, or 429 million euros.

By region and with like-for-like growth versus 2002, Western Europe rang up sales of $4.35 billion, or 3.83 billion euros, up 5.3 percent; North America hit $2.12 billion, or 1.87 billion euros, up 6.1 percent, and other markets were ahead 14.6 percent to $1.46 billion, or 1.28 billion euros.

In the first half, L’Oréal’s cosmetics division’s sales were down 3 percent, or up 7.1 percent on a like-for-like basis. Sales at L’Oréal’s dermatology division fell 9.8 percent, but were up 7 percent on a like-for-like basis.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus