The French beauty manufacturer reported sales of 32.28 billion euros, a 15.3 percent increase on a reported basis and a 16.1 percent increase like-for-like, compared with 2020.

“The L’Oréal results had limited surprises, which is good for a stock with very high expectations,” wrote Bernstein analyst Bruno Monteyne in a research note. He lauded the company’s acceleration in the U.S., growth for its Professional Products and Active Cosmetics divisions, and signs of e-commerce picking up in emerging markets. “All this improves the diversification of group growth at the same time as beating growth expectations,” he said.

“Amid concerns about slowing momentum in China/weakening demand in the U.S., L’Oréal delivered a strong finish to a strong year,” said Bank of America analyst Eva Quiroga in an email. “Both of the feared ‘soft spots’ delivered strong results,” she said.

In the all-important fourth quarter, L’Oréal’s revenues gained 15.4 percent, or 11.2 percent like-for-like, to reach 9.09 billion euros. This compared with a consensus estimate of 9 percent.

“L’Oréal gained market share in all zones, divisions and categories,” said chief executive officer Nicolas Hieronimus in a statement released Wednesday after the close of the Paris Bourse. “Over two years, the group achieved growth of 11.3 percent like-for-like, spectacularly outperforming a market that had returned almost to 2019 levels,” said Hieronimus, who will lead a virtual conference with analysts and journalists on Thursday morning to discuss the results.

Operating profits for the year hit 6.16 billion euros, up 18.3 percent year-over-year, making for an operating margin of 19.1 percent, up from 18.6 percent a year earlier.

Analysts said that while this did not meet expectations, it was likely due to investment in branding. “L’Oréal is quite clear on…preferring to invest in brand equity and long-term growth,” said Bernstein’s Monteyne.

“The slight miss to margins looks to have been driven by materially higher advertising and promotional investment, which we expect to be taken positively,” wrote Jefferies equity analyst Molly Wylenzek in a research note.

L’Oréal’s net profit gained 29 percent to 4.6 billion euros.

E-commerce revenues grew 25.7 percent on a like-for-like basis, and represented 28.9 percent of the company’s total sales.

For the L’Oréal Luxe division — which became the company’s largest in 2021 — fragrance saw particularly strong growth, and the company gained market share in North Asia and performed well in Europe. In North America, following the restructuring of distribution, sales began to accelerate once more, L’Oréal said. The division’s sales grew 21.3 percent on a reported basis and 20.9 percent like-for-like, to 12.35 billion euros. It gained market share in all of its categories, the company said, and consolidated its leadership in fragrance, driven by established lines like Libre by Yves Saint Laurent and launches including Alien Goddess by Mugler and Luna Rossa Ocean from Prada. Skin care was driven by ultra-premium lines Lancôme Absolue and Helena Rubinstein, and anti-aging innovations including Kiehl’s Retinol Skin-Renewing Daily Micro-Dose Serum. In makeup, which remained less dynamic, Lancôme and Shu Uemura performed well.

Consumer Products performed strongly in makeup, L’Oréal said, and saw its sales for the year grow 4.5 percent, or 5.6 percent on a comparable basis, to reach 12.23 billion euros. Momentum was strong in the U.S. and markets including India, Brazil, Mexico and Indonesia. Growth in all zones, and especially in emerging markets, was driven by e-commerce development. Sky High mascara was reportedly Maybelline’s most successful launch ever, and premium innovations in haircare also did well. L’Oréal Paris surpassed 6 billion euros in annual sales and strengthened its position as the world’s number-one beauty brand.

Active Cosmetics continued to outperform, and has doubled its size over the past four years, L’Oréal said. Its sales reached 3.92 billion euros, up 30.3 percent in reported terms and 31.8 percent like-for-like. With growth in all zones, the division performed especially well in North America and North Asia.

Professional Products ramped up its omnichannel activity, and gained 22.2 percent year-over-year, or 24.8 percent on a like-for-like basis, to 3.78 billion euros in sales. Its strongest gains came from the U.S. and mainland China. Kerastase was boosted by new line Curl Manifesto, and L’Oréal Professionnel and Redken also did well.

Broken down by region, sales in North Asia gained 18.6 percent, or 17.6 percent like-for-like, to 9.86 billion euros. In mainland China, the company recorded like-for-like growth of more than 50 percent in the fourth quarter on a two-year stack, breaking records during the Double 11 festival on Tmall, it said.

The beauty giant did not provide further sales breakdown for the Chinese market, but analysts estimated a fourth-quarter sales gain of between 10 and 15 percent year-over-year. “Clearly a slowdown, but that won’t be any news,” said Monteyne. “We would argue that this level of growth is exactly the level you need medium-term in China. If they can do that on such a tough comp, that seems perfectly fine with us.”

Revenues in Europe were up 10.7 percent, or 10.1 percent like-for-like, to 10.18 billion euros, although sales remained slightly below 2019 levels. In North America, sales grew 18.1 percent, or 22.2 percent, to 8.16 billion euros. SAPMENA-SSA [South Asia Pacific, Middle East, North Africa and Sub-Saharan Africa] saw its sales gain 10 percent, or 13.9 percent like-for-like, to 2.31 billion euros. Latin America’s numbers were up 20.6 percent in reported and like-for-like terms, to 1.77 billion euros.

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