THE WHAT? L’Oréal has reported its results for the first half of fiscal 2020. The French beauty giant saw sales dive 11.4 percent (like-for-like) overall but said it was confident that consumer appetite for beauty remains intact.
THE DETAILS Almost all regions and divisions saw sales fall in the second quarter and first half, but there were rays of hope within the breakdown – Active Cosmetics, for example, saw sales grow 4.3 percent (like-for-like) in the second quarter, contributing to a 9 percent growth over the first half compared to 2019 figures for the same period. The similarly sized professional products category, in contrast, saw sales plummet 21.3 percent.
In terms of geographic zones, Western Europe was the hardest hit, with sales down 16.1 percent, while new markets lost a more modest 6.9 percent, primarily thanks to the slight 3.9 percent fall reported for the Asia Pacific region, which L’Oréal attributed to strong growth in Mainland China (+17.5 percent)
THE WHY? Jean Paul Agon, Chairman and CEO, explains, “The L’Oréal group has shown great resilience during this first half of 2020, marked by the crisis of the Covid-19 pandemic…
“The consumption of beauty products over the period was strongly impacted by the closure of millions of points of sale (hair salons, perfumeries, department stores, airport stores, etc.) which caused a real crisis of supply, rather than demand, with consumers temporarily unable to purchase products and services.
We approach this second half with lucidity, confidence and resolve. Lucidity because the global health crisis is unfortunately not over. Confidence because consumers’ appetite for beauty is intact, access to points of sale should be easier going forward, and e-commerce will continue to get stronger. And finally resolve because in this second half of the year, we are embarking on an aggressive plan of new product launches and business drivers to stimulate, in partnership with our retail partners, the return of the consumption of beauty products. We are therefore determined to outperform the market, find again the path to growth if the sanitary conditions allow it, and deliver solid profitability.”