L’Oréal Q1 2018: sales up 6.8 percent thanks to Chinese boom

L’Oréal Q1 2018: sales up 6.8 percent thanks to Chinese boom

L’Oréal has reported its results for the first quarter of fiscal 2018. The French beauty giant reported sales of €6.78 billion, a rise 6.8 percent like-for-like but a drop of 1 percent in reported terms.

L’Oréal noted ‘sharp contrasts between divisions and geographic zones’ with growth driven by the Luxe and Active Cosmetics divisions (increasing 14 percent and 10.2 percent respectively on a like-for-like basis). In terms of regions, new markets were the star, up 14.9 percent driven primarily by Asia-Pacific, which gained 21.1 percent, while Western Europe gained a sluggish 0.4 percent and North America grew 2.5 percent.

“The L’Oréal group has started 2018 with a very dynamic like-for-like growth, which continues to reflect sharp contrasts,” said Jean-Paul Agon, Chairman and CEO.

“All the Divisions are growing. L’Oréal Luxe has delivered an impressive performance by accelerating its growth, thanks to the power of its four major global brands – Lancôme, Yves Saint Laurent, Giorgio Armani and Kiehl’s – all posting growth of more than 10 percent. The Active Cosmetics Division, with double-digit growth, is driven by the success of its La Roche-Posay and SkinCeuticals brands, the new impetus of Vichy and the dynamism of CeraVe. The Consumer Products Division has begun the year with growth that is still moderate and sharply contrasted between the regions, with outstanding performances in China, a situation that is still difficult in France, and an improved sell-out in the United States. L’Oréal Paris is notably performing well across all its categories. The gradual transformation of the Professional Products Division is producing its first positive results, held back however by the sluggishness of some major markets in Western Europe.

“In geographic terms, the highlight of the first quarter is the return to strong growth in the New Markets, especially in the Asia Pacific Zone, where, in China, consumers’ aspirations for iconic brands remain just as strong.

“The Group’s digital acceleration has moved up a gear with the acquisition of the Canadian company ModiFace, which provides the most innovative technologies to enhance services and the beauty experience for all our brands. Furthermore, e-commerce sales [3] at +33.8% continue to increase rapidly, and now account for 8.8% of sales.

“In a currency context that remains unfavourable, the first quarter demonstrates the vitality of our organic growth, auguring well for the future. For the full year, we are confident in our ability to outperform the market and achieve significant growth in our like-for-like sales, while increasing our profitability.”