PARIS — Strong currency headwinds provided a considerable boost to L’Oréal in the first quarter, when the company posted growth in all of its divisions and all geographic zones.
Reporting its sales for the three months ended March 31 after the market closed Monday, the world’s largest beauty company said revenues in reported terms climbed 14.1 percent to 6.44 billion euros, or $6.99 billion, year-on-year.
On a like-for-like basis, sales grew 4 percent, and at constant currency rates, they increased 5.2 percent.
“The group has made an encouraging start to the year, with performances remaining contrasted by division,” said chairman and chief executive officer Jean-Paul Agon.
The L’Oréal Luxe and Active Cosmetics divisions were the biggest contributors to the beauty firm’s growth in the first quarter.
“In an economic context that is still volatile, we confirm that we are confident in our ability to outperform the market this year once again, and to achieve growth in sales and profit,” he added.
“The first quarter [should] be below the average for the year,” said Agon during a conference call with analysts. “Total year growth should be higher than the first quarter. It will come mostly from the acceleration of the Consumer division.”
For the full year, the company is predicting a positive currency effect of 9.3 percent.
First-quarter sales for the Consumer Products division, the company’s largest, grew 11.6 percent year-on-year to 3.08 billion euros, or $3.34 billion. On a like-for-like basis, the division saw lesser growth of 1.7 percent.
“The mass market is still much slower, that’s one of the paradoxes of the beauty market today. It’s due mostly to Western Europe,” Agon said.
The division was reinforced by its makeup activity, notably thanks to the launches of Infallible Matte foundation from L’Oréal Paris, Lash Sensational mascara from Maybelline and the dynamism of newly acquired NYX, which saw growth of 50 percent in the first quarter.
L’Oréal Luxe revenues climbed 20.1 percent to 1.75 billion euros, or $1.9 billion, boosted by Yves Saint Laurent, Giorgio Armani Beauty and Kiehl’s. On a like-for-like basis, the division saw sales increase 7.5 percent year-on-year.
“We are outpacing the market everywhere except the U.S.,” Agon said of the division’s performance.
Professional Products saw growth of 16 percent to 852.6 million euros, or $925.2 million, or 3.5 percent on a like-for-like basis, boosted by the U.S., India and Brazil.
“We have no indication that the salon market is yet improving, maybe a little bit in Western Europe,” Agon said. “Our sales are improving and that’s because of launches and marketing activities.”
Active Cosmetics, meanwhile, saw sales increase 10.2 percent to 559.2 million euros, or $606.8 million. On a like-for-like basis, they rose 7.6 percent, boosted by double-digit growth from La Roche-Posay.
The Body Shop revenues grew 9.1 percent, or 4.2 percent like-for-like, to 192.4 million euros, or $208.8 million.
Broken down by region, North America saw the best performance, with sales up 25.2 percent to 1.62 billion euros, or $1.76 billion. Like-for-like, they increased 2.4 percent.
Sales in New Markets climbed 17.4 percent, or 7.5 percent like-for-like, to 2.52 billion euros, or $2.73 billion, with varying performances by zone. In Asia-Pacific, like-for-like sales increased 5.8 percent, while in Latin America, they increased 10 percent. In Eastern Europe, revenues grew 9.2 percent on a like-for-like basis, boosted by Russia, Turkey, Ukraine and Poland. Africa and the Middle East saw like-for-like sales up 11.3 percent.
In Western Europe, revenues increased 4 percent to 2.1 billion euros, or $2.28 billion. In like-for-like terms, they grew 1.3 percent, with varying performances by country. Sales growth was stronger in the U.K. and Germany than in other markets in the region, although all major markets in the region saw positive results, L’Oréal said.
All euro figures have been converted at average exchange for the period.