PARIS — L’Oréal announced Thursday that second-quarter sales were up 6.1 percent to 3.7 billion euros, or $4.46 billion at the average exchange rate.
This story first appeared in the July 9, 2004 issue of WWD. Subscribe Today.
On a like-for-like basis, sales would have increased by 7.5 percent, the company said in a statement.
The French beauty giant also confirmed its goal to ring up full-year double-digit earnings growth for the 20th year and exceed its 2003 sales growth of 7.1 percent.
“After gathering speed in the second quarter, L’Oréal achieved encouraging first-half sales growth, in line with our expectations,” stated Lindsay Owen-Jones, L’Oréal’s chairman and chief executive officer. “The good organic growth achieved by our brands, our continuing rapid expansion in new markets and the numerous initiatives planned for the second half make us optimistic about the full-year figures.”
First-half consolidated sales totaled 7.4 billion euros, or $9.09 billion, an increase of 3.6 percent. On a like-for-like basis, sales were up 6.4 percent.
Currency fluctuations negatively impacted the half by 3.3 percent. In the second quarter, currency changes had a negative impact of 1.8 percent, compared with 4.5 percent in the first three months of the year.
Changes in consolidation, including the consolidation of the Mininurse and Yue Sai brands in China and the 100 percent consolidation of Japan’s Shu Uemura, positively impacted sales by 0.5 percent in the six-month period.
In the half, L’Oréal’s cosmetics sales grew 3.8 percent to 7.25 billion euros, or $8.9 billion. By division, professional products were up 4.9 percent to 1.03 billion euros, or $1.26 billion. Consumer products were up 2.2 percent to 4.04 billion euros, or $4.96 billion. Luxury products were up 4 percent to 1.64 billion euros, or $2.01 billion, and active cosmetics were up 16 percent to 498 million euros, or $611.5 million.
L’Oréal’s dermatology sales dropped 5.6 percent to 131 million euros, or $160.8 million in the half.
By region for the first six months, Western Europe rang up sales of 3.9 billion euros, or $4.79 billion, up 1.8 percent; North America hit 1.82 billion euros, or $2.23 billion, down 2.7 percent, and “the rest of the world” was ahead 19.1 percent to 1.53 billion euros, or $1.88 billion. Among particularly dynamic markets were Asia, where sales were up 23.3 percent, and Eastern Europe, where the increase was 28.3 percent.
The company said in the statement that consumer spending in Western European countries, including France, Germany and Italy, was sluggish. A luxury products revival was hampered by stock reductions in selective distribution channels.