PARIS — L’Oréal maintained its first-half momentum with a 14.6 percent increase in third-quarter sales on the strength of its consumer products unit and growth in new markets.
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“Q3 was a good quarter,” chief executive officer Jean-Paul Agon said during a Thursday conference call with analysts. “Growth was strong across the board in all regions and categories.”
The rise was mainly due to market share gains. “If your market is flat, the only way to grow is to grow market share,” Agon explained.
He declined to give predictions for the all-important fourth quarter. “We hope it will be better than last year,” he said.
Agon confirmed the company’s full-year expectations of like-for-like growth in the region of 3 to 4 percent.
Third-quarter sales rose to 4.85 billion euros, or $6.25 billion at average exchange, for the period ended Sept. 30. On a like-for-like basis, turnover grew 5.8 percent over the prior-year period. The effect of exchange rates over the period was 8.3 percent.
Particularly in the consumer goods division, market share gains contributed to much of the 15.1 percent growth reported. “Maybelline is really flying, with market share gains in North America and Europe,” Agon said, revealing that the brand had seen growth of 12.6 percent this year so far.
Overall sales for the consumer products division grew to 2.39 billion euros, or $3.08 billion.
Mass market hair care also did well, he said. Garnier sales — hair care and skin care combined — are up between 6 and 7 percent so far this year.
Luxury products saw turnover up 12.6 percent to 1.14 billion euros, or $1.47 billion. “The evolution of sellout in luxury worldwide has been positive,” Agon revealed. “We are slightly ahead of the market, which is up around 5.6 percent, while we are at 6 percent [like-for-like]. We should, could and will do better, but we are not lagging.”
Sales for the professional products business increased the most, up 16.1 percent to 684.2 million euros, or $882.8 million. This was largely due to the continued rollout and growth of Inoa hair color.
Agon admitted that the thorn in the side of professional products was the U.S. “Salon traffic has not increased yet, but we are doing better than the market, especially thanks to Inoa.”
Active cosmetics saw revenues of 307.9 million euros, or $397.3 million, up 9.3 percent.
The Body Shop, calculated as a separate division, saw sales of 172.1 million euros, or $222 million, up 6.2 percent. On a like-for-like basis, revenues fell 0.6 percent. “We’re not satisfied, but through launches and new stores, we hope to improve it,” Agon said.
Broken down by region, in Western Europe, sales increased 2.6 percent to 1.72 billion euros, or $2.21 billion. North America saw turnover up 17.8 percent to 1.13 billion euros, or $1.46 billion, although in like-for-like terms, this represented lesser growth of 3.8 percent.
Sales in new markets grew 26.2 percent to 1.68 billion euros, or $2.17 billion. This included a 28.5 percent increase in Asia-Pacific and an 11.1 percent rise in Eastern Europe.
In Latin America, sales grew 35.9 percent. “Brazil is on fire, Mexico is back and Argentina is good. The market has rarely been so good,” Agon commented.
In Africa and the Middle East, revenues were up 25.5 percent.
Responding to a question about rumors that L’Oréal would buy direct-seller Avon, Agon said, “There are huge opportunities in our existing channels. This is not a direct answer, but you will understand.”
L’Oréal shares closed on the Paris Euronext stock exchange up 2.94 percent to 87.44 euros, or $121.31, Thursday, before the results were published.