L’Oréal unveiled a marginal uptick in its third-quarter revenues on Tuesday, October 21, as growth was moderated by adverse foreign exchange impacts.
Revenues increased 0.5 percent, reaching 10.3 billion euros (US$12 billion), the company disclosed in a statement. Excluding currency and scope variations, sales showed a 4.2% rise on a comparable basis. This was marginally below the 10.4 billion euros predicted by analysts surveyed by Bloomberg.
The luxury products division (Lancôme, Yves Saint Laurent, Giorgio Armani) of L’Oreal, which is slated to integrate brands being acquired from Kering, experienced a 1.5 percent decrease to 3.7 billion euros in the third quarter (but showed a 2.5% gain on a like-for-like basis).
Medik8, the UK-based skincare brand in which L’Oréal secured a controlling stake and that integrated into the division in September, “sustained robust double-digit expansion,” according to the news release.
The professional products sector (Kérastase, Redken…) saw sales grow by 6.1% to 1.23 billion euros (+9.3% like-for-like).
The Consumer Products segment, featuring Garnier, Maybelline, and L’Oréal Paris, experienced a 0.4% revenue increase to 3.76 billion euros in the third quarter (+3.8% on a like-for-like basis).
Dermatological beauty product sales, encompassing brands such as La Roche-Posay, CeraVe, and Vichy, attained 1.6 billion euros, a 1.1% climb propelled by e-commerce and personalized services for hair salons.
“Advancement was widespread, with all regions contributing,” stated Nicolas Hieronimus, the Chief Executive Officer of L’Oréal. European sales saw a 4.6% jump to 3.6 billion euros.
“The rebound in our two key markets – the US and mainland China – proceeded,” according to the executive. North American revenue declined by 4.3% to 2.97 billion euros, though it showed a 1.4% ascent at constant exchange rates.
Similarly, in North Asia, sales dropped marginally by 0.1% to 1.95 billion euros but showed a 4.7% expansion on a comparable basis (constant scope and exchange rates).
Sales for the initial nine months of the year grew by 1.2% to reach 32.8 billion euros (a 3.4% increase on a like-for-like basis).
Creed, Gucci, Armani
The results were made public just under 48 hours following L’Oréal’s declaration of the 4 billion euros procurement of the beauty sector from the luxury conglomerate Kering. This strategic investment — the company’s most substantial to date — will fortify L’Oréal’s dominance as the world’s preeminent fragrance producer.
The agreement facilitates L’Oréal’s takeover of the upscale fragrance label Creed, in conjunction with 50-year licensing agreements for beauty and fragrance lines, notably Balenciaga, Bottega Veneta and Gucci.
“The acquisition of Creed empowers us to advance further into high-end, specialized fragrances priced above 200 euros,” Chief Executive Nicolas Hieronimus conveyed to Le Figaro. He appended that Creed’s revenues could potentially triple to reach 1 billion euros swiftly.
“For Gucci, the objective is to augment the beauty business to parallel the fashion segment — akin to what we’ve accomplished with Yves Saint Laurent — which is not yet the current situation,” articulated Nicolas Hieronimus.
HSBC estimates Gucci’s beauty sales under Coty at approximately 600 million dollars (500 million euros).
Hieronimus also expressed interest in acquiring a stake in the Italian firm Armani — as suggested by its late founder. “The acquisition of Kering’s beauty operations doesn’t alter our intent to participate in Armani,” he clarified.
