L'Oréal Profit Matches Estimates as Consumer Unit Sales Rebound

PARIS, France — L'Oréal SA reported 2014 earnings that matched analysts' estimates as buying back its own shares from Nestle SA and a stronger dollar helped compensate for the weakest like-for-like revenue growth in five years.

Operating income rose to 3.89 billion euros ($4.4 billion), Paris-based L'Oréal said Thursday in a statement after markets closed, the same as the average of 27 estimates compiled by Bloomberg. Like-for-like sales increased 3.7 percent, the slowest pace since 2009 when they fell 1.1 percent.

Chief Executive Officer Jean-Paul Agon in November lowered expectations for 2014 by predicting global cosmetics market growth would be closer to 3 percent than 3.5 percent. L’Oreal’s annual revenue rose slightly faster than that as sales at the troubled consumer-products unit that groups Garnier shampoo and Maybelline New York makeup rebounded in the fourth quarter.

“In an economic environment that is uncertain, but more favorable on the monetary front, all our teams are focused to ensure L'Oréal outperforms the market in 2015, and to deliver sales and profit growth,” Agon said in the statement.

Fourth-quarter sales at the maker of Yves Saint Laurent scents gained 4.9 percent on a like-for-like basis, beating analysts' estimates for 3.6 percent growth. Sales at the consumer-products unit, L'Oreal's largest, rose 3 percent, also more than predicted.

The company made a capital gain of about 2 billion euros from buying back and canceling 8 percent of its stock held by Vevey, Switzerland-based Nestle.

Full-year net income increased to 4.91 billion euros from 2.96 billion euros, L'Oréal said. Total sales advanced 1.8 percent to 22.5 billion euros.

By: Andrew Roberts; editors: Celeste Perri and Paul Jarvis.