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PARIS, France — L'Oreal SA fell in Paris trading after third-quarter revenue missed analysts' estimates amid a slowdown in sales of luxury cosmetics in Asia.
Sales rose 3.7 percent excluding acquisitions, disposals and currency swings, the world’s largest cosmetics maker said Thursday after European markets closed. Analysts predicted growth of 4.5 percent, according to the median of estimates compiled by Bloomberg. The shares fell as much as 3.3 percent.
Slowing economies in Asia and Latin America have damped consumer spending on shampoos and face creams. The French company’s sales growth in new markets slowed for the second straight quarter to 4.8 percent, trailing estimates for a 5.8 percent gain. The rate was the weakest since the first quarter of 2009.
The “miss suggests scale is not a strong enough buffer” against emerging-market volatility, said Cedric Besnard, an analyst at Barclays. “The slowdown in market conditions was bound to impact its top-line growth.”
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Asia Turbulence
All divisions trailed estimates with the exception of active cosmetics, one of L’Oreal’s smallest units. Sales at the “Luxe” division, which includes Lancome scents and Urban Decay makeup, rose 4.2 percent, compared with the 6.5 percent gain anticipated by analysts. The rate was the weakest since the fourth quarter of 2010.
L’Oreal’s luxury unit “experienced a temporary slowdown as a result of market turbulence over the summer in Asia, in Hong Kong and in travel retail,” L’Oreal said.
Emerging-market growth was hampered by difficulties in Brazil and by taking over agents’ contracts in the Middle East, L’Oreal said. In China, sales growth was in line with earlier quarters.
L’Oreal also reported lackluster growth in western Europe, where the company should have benefited from an easier base of comparison after poor weather eroded sales in July and August last year.
Total revenue was 5.94 billion euros ($6.5 billion), in line with estimates.
“We are still confident for the year end,” L’Oreal said, repeating it expects to outpace the market in 2015, and increase sales and profit. Last month, L’Oreal revised its forecast for 2015 global cosmetics market growth to about 3.5 percent.
By Andrew Roberts; editors: Matthew Boyle, Thomas Mulier, Paul Jarvis.
