PARIS — L’Oréal’s quarterly sales gain came in slightly under financial analysts’ expectations.
This story first appeared in the July 17, 2013 issue of WWD. Subscribe Today.
Its 5.2 percent like-for-like second-quarter revenue growth to 5.81 billion euros, or $7.58 billion, was below consensus and Sanford C. Bernstein & Co.’s estimate of 5.6 percent, according to Andrew Wood, an analyst there. On a reported basis, the French beauty giant’s sales increased 4.2 percent.
“In a slightly more difficult operating context than anticipated at the start of the year, L’Oréal continued to deliver solid organic top-line growth, outperforming the global cosmetics market by close to 1.5 times — in line with the group’s long-term average,” said UBS analyst Eva Quiroga.
According to L’Oréal, the worldwide beauty market has decelerated slightly, advancing by 3.5 to 4 percent, said Jean-Paul Agon, chairman and chief executive officer, during a conference call with financial analysts on Tuesday evening.
“While Western Europe was gratifyingly robust, implying continued share gains, and new markets were back in double-digit territory, North America was somewhat weaker than we had hoped for, reflecting ambitious sell-in of new products at the start of the year — resulting in a weaker-than-anticipated sell-out on the back of the softening market,” continued Quiroga.
She was referring to geographic zones where L’Oréal’s second-quarter sales grew 1.7 percent, 10.3 percent and 4.5 percent on a like-for-like basis, respectively.
Also in the period on a comparable basis, L’Oréal’s Consumer Products division’s revenues rose 6.1 percent to 2.8 billion euros, or $3.66 billion. Sales at L’Oréal Luxe increased 5.5 percent to 1.41 billion euros, or $1.83 billion. Revenues were up 2.7 percent to 779.3 million euros, or $1.02 billion, for Professional Products; 8.6 percent to 409.5 million euros, or $534.7 million, for Active Cosmetics, and 0.8 percent to 223.9 million euros, or $292.4 million, for Dermatology. Meanwhile, The Body Shop sales declined 0.8 percent to 186.9 million euros, or $244 million.
In the first half, L’Oréal’s revenues increased 4.7 percent to 11.74 billion euros, or $15.42 billion. They advanced 5.4 percent on a like-for-like basis.
Dollar figures are calculated at average exchange for the periods to which they refer.
“As for the rest of the year, we expect momentum — both, in the market and for L’Oréal — to be similar to that in [first-half 2013] with [fourth-quarter 2013] likely stronger than [third-quarter 2013] — supported by a number of new product launches,” said Quiroga.
Agon said he expects the company to again significantly outperform the market in the July-through-December period. And he reiterated that L’Oréal remains confident it will achieve another year of sales and profit growth in 2013.