L'Oréal sales grow despite China's beauty downturn

French cosmetics giant L'Oréal on Thursday reported year-on-year sales growth in the first quarter, as activity in Europe and emerging markets offset a "downturn" in China's beauty industry. Sales rose 8.3% to 11.24 billion euros in the first three months of the year, although the North Asian market fell nearly 4% to 2.7 billion euros. The figures beat analysts' expectations for the group, the group includes brands Garnier, Maybelline, Prada and Yves Saint Laurent.

L’Oréal CEO Nicolas Hieronimus said:"2024 is off to a very good start... Sustained double-digit growth in Europe, coupled with continued strength in emerging markets, is more than enough to offset the only gradual recovery in North Asia."

Mainland China's "beauty market remains sluggish," with sales rising just 6.2 percent, despite double-digit growth in Japan and Hong Kong, a company statement said. Revenues in Europe grew by more than 12% thanks to new IT systems, while sales in North America increased by 11.9%.

"In an environment of continued economic and geopolitical tensions, we are optimistic about the outlook for the beauty market and confident in our ability to continue to outperform the market, the strong performance of Dermatology and Quality more than compensated for the short-term challenges in the luxury goods sector." Hieronimus said.

Consumer products division Garnier, Maybelline, L'Oréal Paris, NYX Professional Makeup grew +9.2%, with sales exceeding $4 billion. "All four major brands achieved double-digit growth," the group said in a statement.

Dermatological Beauty reported impressive growth of 19.6%, with sales exceeding €2 billion. La Roche-Posay remains the No. 1 growth contributor, while CeraVe grows strongly in both the U.S. and international markets

The luxury goods segment was affected by a "downturn" in North Asia's beauty markets. The segment grew by 2.2% to €3.8. Fragrance sector that includes Yves Saint Laurent, Valentino, Prada is once again the most dynamic category in the sector. Finally, the Professional Products segment also achieved strong growth of +8.7%, reaching €1.2 billion.

"In an environment where economic and geopolitical tensions continue, we are optimistic about the outlook for the beauty market and confident in our ability to continue to outperform the market and deliver another year of sales and profit growth," Hieronimus concluded.