L’Oréal saw 3 percent wiped off the value of its shares as the market absorbed its half year results last week, according to a report published by Reuters.
The French beauty giant saw sales grow 6.6 percent in like-for-like terms (up 7 percent in constant currency but down 0.2 percent on a reported basis) to €13.39 billion. Broken down, it was the consumer division’s 2.3 percent like-for-like growth in the second quarter that spooked the market, despite the fact that both active cosmetics and the group’s luxury division continue to deliver double digit growth (12.9 percent and 13 percent respectively).
“In a beauty market which remains dynamic and is becoming more premium, L’Oréal is continuing to achieve strong growth. In lively markets, the L’Oréal Luxe and Active Cosmetics Divisions have both recorded double-digit growth, driven by the power of their brand portfolios and the quality of their innovations. The Consumer Products Division, especially with a robust performance at L’Oréal Paris, has recorded moderate growth, held back by an environment that is very difficult in some markets,” said Jean-Paul Agon, Chairman and Chief Executive Officer.
On a regional basis, the group saw strong growth in new markets, particularly in Africa, Middle East and Asia, Pacific as well as a small improvement in North America. Profitability saw a strong improvement, up 30 basis points.