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L’Oréal’s sales growth in the region that includes China turned positive in the third quarter, lifted by demand for its high-end products.
Like-for-like sales rose 4.7 percent in North Asia, L’Oréal SA said in a statement Tuesday. Analysts had expected a gain of 3.2 percent. The result was an improvement from the second quarter, when sales in the region tumbled. Still, group sales overall rose 4.2 percent, below estimates.
Growth in mainland China accelerated to “mid-single-digits” in the third quarter from low-single-digits earlier in the year, the company said, with sales buoyed by a recovery in demand for its luxury products.
L’Oréal’s so-called luxe unit includes brands such as Lancôme and Helena Rubinstein. The company moved to bulk up the division earlier this week with a €4 billion ($4.65 billion) deal that includes the purchase of fragrance maker House of Creed from Kering SA, as well as 50-year licenses to develop and market beauty offerings for some of its fashion labels, including Gucci, once the current partnership with Coty Inc expires.
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L’Oréal’s American depositary receipts tumbled as much as 5.2 percent in New York trading after the results. The shares have gained 16 percent so far this year in Paris.
The beauty group has been on the hunt in recent years, buying a series of brands including Aēsop in 2023. Recently, the group reshuffled its top management, appointing notably Alexis Perakis-Valat as its new head for its North America business.
By Angelina Rascouet
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The French luxury giant has put aside its ambitions of running beauty in-house. Despite having an enviable stable of brands, the complexity of the business and mounting debt meant it wasn’t worth the pain.
