PARIS — L’Oréal reported on Tuesday second-quarter sales ticked ahead 0.9 percent to 4.99 billion euros, or $7.19 billion, negatively impacted in part by foreign exchange rates.
This story first appeared in the July 13, 2011 issue of WWD. Subscribe Today.
The firm also received good news on the legal front.
The Court of Justice of the European Union handed down a judgment in a case involving L’Oréal’s allegations of trademark infringement on eBay. It was ruled that eBay may be liable for trademark infringements made by users on its site if it plays an active role in their use.
For the first half, the French beauty giant posted a sales increase of 5 percent to 10.15 billion euros, or $14.24 billion.
On a like-for-like basis, revenues in the three-month period ended June 30 gained 4.6 percent.
Dollar figures were converted at average exchange rates for the periods to which they refer.
In the six-month period, strong growth was noted in the Asia-Pacific region, with a 13.5 percent rise, and Latin America, with an 18 percent uptick. Business was more difficult in Eastern Europe (particularly Russia and the Ukraine), where revenues dipped 3.8 percent. Altogether, sales in “new markets” grew 10.1 percent. Western Europe, meanwhile, registered a 1.4 percent sales gain and revenues from North America increased 3 percent.
Jean-Paul Agon, L’Oréal chairman and chief executive officer, is optimistic about full-year 2011. One reason has to do with product introductions.
“This year the phasing of launches is more balanced toward more launches in the second part of the year, rather than the first part,” he said during a financial analyst conference call Tuesday.
As for the legal wrangling with eBay, the court stated, “When the operator has played an ‘active role’ of that kind, it cannot rely on the exemption from liability which EU law confirms, under certain conditions, on online service providers such as operators of Internet marketplaces.
“The court holds that EU law requires the member states to ensure that the national courts with jurisdiction in relation to the protection of intellectual property rights are able to order the operator to take measures which contribute, not only to bringing to an end infringements of those rights by the users, but also to preventing further infringements of that kind,” the court continued. “Those injunctions must be effective, proportionate and dissuasive, and must not create barriers to illegitimate trade.”
“L’Oréal is satisfied with the ruling the Court of Justice of the European Union rendered today, which is a step toward effectively combating the sale of counterfeiting brands and products via the Internet,” said a company spokeswoman.
Stefan Krawczyk, senior director and counsel government relations of eBay Europe, said, “The judgment provides some clarity on certain issues and ensures that all brands can be traded online in Europe. As a marketplace, eBay provides a level playing field for all online sellers and will continue building constructive partnerships to expand the range of brands being sold on eBay.”
L’Oréal in 2007 took legal action against eBay in Belgium, France, Germany, Spain and the U.K. over alleged counterfeit fragrances and cosmetics. The U.K. High Court, before which the L’Oréal versus eBay dispute is pending, asked the Court of Justice related questions in August 2009.