PARIS — L’Oréal’s business remains robust, with fourth-quarter 2022 sales beating market expectations.
Sales at the maker of Lancôme, Kérastase and Garnier products reached 10.32 billion euros in the three months ended Dec. 31, registering a 13.5 percent gain in reported terms and an 8.1 percent rise on a like-for-like basis.
Financial analyst consensus had pointed to a 6.8 percent rise, like-for-like.
“The beat was particularly strong in Professional (plus 8.1 percent versus consensus of 2.9 percent),” wrote Bruno Monteyne, senior analyst of European Food, European Household and Personal Care at Bernstein, in a note published Thursday evening.
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Molly Wylenzek, equity analyst at Jeffries, agreed, writing in a note: “Pro [was] surprising most on the upside while China improved sequentially.”
“All eyes are on China, where the company says that in mainland China they ‘grew appreciably,’ compared to Estée [Lauder Cos.] mentioning ‘negative single digit’ decline in China retail,” Monteyne continued.
L’Oréal came out with its results Thursday evening in a statement released after the close of the Paris Bourse.
Nicolas Hieronimus, L’Oréal chief executive officer, in the statement, called the group’s performance “remarkable,” and underlined that it had maintained growth of more than 20 percent quarter after quarter compared with 2019, before the coronavirus pandemic struck.
“We have emerged stronger from 2022 and reinforced our position as the world’s leading beauty company,” he said.
In the fourth quarter, L’Oréal’s Professional Products division’s sales were up 15 percent to 1.22 billion euros. The branch strengthened its position and maintained growth momentum around the world, with an “outstanding performance” in mainland China, India and Brazil, according to L’Oréal.
The Active Cosmetics division registered sales of 1.27 billion euros, a 28 percent rise. It grew two-times faster than the dermocosmetics market overall, and posted double-digit sales increases in all geographic zones. L’Oréal highlighted the division’s strong performance in North America; the South Asia-Pacific, Middle East, North Africa and sub-Saharan Africa, or SAPMENA-SSA, zone, and mainland China.
Sales at the Consumer Products division hit 3.68 billion euros, increasing 11.8 percent. All major brands in the branch outperformed the market, according to L’Oréal.
On the prestige end, L’Oréal Luxe generated sales of 4.15 billion euros, a 10.7 percent rise. The division performed better than the global luxury beauty market, according to the group.
In the fourth quarter, North Asia was L’Oréal’s largest geographic market, with sales of 3.29 billion euros, representing an 8.7 percent rise. There, the group said the Professional Products and Active Cosmetics divisions maintained their double-digit growth, driven by premium brands.
L’Oréal said that in mainland China, where public health restrictions had affected the beauty market, the group’s online sales grew by double digits.
The company said that even with rising inflation, the European beauty market surpassed pre-pandemic levels, bolstered by categories including fragrance, makeup and sun care, and that the group “significantly outperformed” the market.
In Europe, L’Oréal generated sales of nearly 3 billion euros, up 8.4 percent.
In North America in the fourth quarter, company sales advanced 23.5 percent. In full-year 2022, they hit the 10 billion-euro mark for the first time, even though inflation was rising there.
L’Oréal said that despite sourcing challenges, it achieved “solid growth” across all markets in the SAPMENA-SSA zone.
“Consumers returned to stores, and L’Oréal recorded booming sales in the brick-and-mortar channel,” the company said. The group’s sales in the region came in at 771.3 million euros, gaining 16.6 percent.
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L’Oréal registered double-digit growth in key Latin American countries and increased market share there, thanks to all branches, led by the Consumer Products division. The company’s e-commerce sales continued growing in the region, where L’Oréal also posted double-digit gains in brick-and-mortar stores.
For full-year 2022, the group’s net profit rose 24.1 percent versus 2021 to 5.71 billion euros, while operating profit was 7.46 billion euros, a 21 percent increase.
Company sales in the 12 months were 38.26 billion euros, advancing 18.5 percent. The group outperformed the beauty market in all of its divisions and geographic regions. Against 2019, L’Oréal’s 2022 sales climbed 23.4 percent.
“Mindful of the current uncertainties, we remain ambitious for the future, optimistic about the outlook of the beauty market, and confident in our ability to outperform the market and achieve in 2023 another year of growth in sales and profits,” Hieronimus said.