L'Oréal headquarters

PARIS — L’Oréal shrugged off tough comps for the first quarter of 2019 and delivered strong results that broadly beat financial analysts’ expectations, with robust growth in Asia contributing to offset a tepid North American market.

The world’s largest beauty company said Tuesday evening after the close of the Paris Bourse that the ongoing strength of its Luxe and Active Cosmetics Divisions, as well as momentum in New Markets, helped propel group sales up 11.4 percent.

Revenues for the maker of Lancôme, Garnier and Maybelline products in the three months ended March 31 reached 7.55 billion euros, advancing 7.7 percent on a like-for-like basis. Analysts, meanwhile, had expected 6.6 percent gains.

“Pleasingly, momentum was a bit more broad-based by channel (with mass seeing some pickup, although luxury continued to dominate); regional growth continued to be driven by New Markets/Asia (while developed markets remained pedestrian),” wrote Eva Quiroga, an analyst at Deutsche Bank, in a note.

Although contrasted, all of L’Oréal’s divisions posted increases: revenues grew 19 percent for L’Oréal Luxe, 14.1 percent for Active Cosmetics, 7 percent for Consumer Products and 4.8 percent for Professional Products.

Sales in each geographic zone were in the black but differentiated, too. Revenues rose 19.5 percent in New Markets, which includes the Asia Pacific region that, with sales of 2.4 billion euros, became the group’s largest zone for the first time, powered by countries such as China. Revenues in that country grew approximately 32 percent, and India saw close to an 18 percent sales uptick.

“We are definitely gaining market share,” said Jean-Paul Agon, L’Oréal chairman and chief executive officer, during a call with analysts on Tuesday.

“In contrast, North America is much more difficult,” continued Agon. There, group sales were up 9.2 percent in reported terms and 1.2 percent on a like-for-like basis.

“The market is really slower than it was before,” said the executive, estimating that it’s growing by around 1 percent.

Agon said the start of this year in North America has been strong for L’Oréal’s Active Cosmetics and Professional Divisions, and that the group’s business is on a par with the continent’s luxury market and below its consumer market.

In Western Europe, L’Oréal’s sales gained 2.1 percent in the first quarter.

Speaking of the company’s overall results for the first three months of this year, Andrew Wood, an analyst at Sanford C. Bernstein & Co. LLC, wrote in a note: “The strong end to 2018 has continued into 2019, as Q1 matched the growth seen in Q4 2018, on much tougher compares, and so remained the equal-highest growth seen for over 11 years, since Q4 2007.”

L’Oréal’s first-quarter results were further bolstered by its e-commerce business, which advanced 43.7 percent and generated about 12 percent of the group’s total sales. “We have more or less the same type of [e-commerce] growth across the four divisions [and regions],” said Agon. “It is also pretty well split between [direct-to-consumer], which is our own sites plus Tmall, the online pure players and the e-tailers.”

He explained China is leading the way for e-commerce development within L’Oréal. “Internally, we are really using China as a role model and as a pilot for the development of e-commerce across the world,” said Agon.

Also buoying the group’s business was travel-retail, with sales rising 24.1 percent, and skin care, which is L’Oréal’s largest and fastest-growing product category, with revenues up by mid- to high-teen percentages. Makeup and fragrance sales advanced by midsingle-digit percentages, while lesser growth was registered for the hair color, hair care and hygiene segments.

Looking ahead, L’Oréal executives said despite an economic environment that remains volatile, uncertain and contrasted, the company’s strong start to this year makes them confident that the group can outperform the market, and have another year of sales and profit growth in 2019.

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