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NEW YORK, United States — L'Oreal SA, the world's largest cosmetics company, reported second-quarter sales that missed analysts' estimates as demand for Maybelline New York makeup and other consumer products remained sluggish in the U.S.
Like-for-like revenue increased 4.1 percent, Paris-based L’Oreal said today after European markets closed, accelerating from the previous quarter’s 3.5 percent gain. Analysts predicted 4.4 percent, based on the median of 13 estimates compiled by Bloomberg. Sales rose 2.4 percent in North America, compared with a 0.6 percent fall in the first three months.
The consumer products division’s growth is being held back by “a sluggish” U.S. market and, to a certain extent, by a slowdown in emerging markets, “but remains solid in western Europe,” L’Oreal said. The company has said it expects 2014 revenue to increase more than its 3.5 percent to 4 percent estimate for the cosmetics market.
L’Oreal predicted in April that North American consumer- product sales would return to growth in the second quarter and accelerate through 2014. Lackluster demand there in the first three months contributed to the company’s weakest quarterly sales growth in more than four years. L’Oreal agreed in June to buy Los Angeles-based NYX Cosmetics for an undisclosed price to bolster its makeup offerings in the region.
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First-half operating income rose 0.2 percent to 2.03 billion euros ($2.72 billion). Analysts predicted 2.02 billion euros, according to the average of 12 estimates compiled by Bloomberg.
The personal-care market is consolidating as companies from Germany’s Henkel AG to Japan’s Kose Corp. buy niche brands to widen product ranges. Since January, L’Oreal has acquired facial-mask maker Magic Holdings International Ltd. and spa brands Decleor and Carita. Including the buyback of 8 percent of its stock from Nestle SA, L’Oreal has spent more than $5 billion on deals this year, and it is looking for more targets.
By Andrew Roberts; editors: Celeste Perri, Kim McLaughlin, James Callan.
