L’Oréal boosted by makeup and perfume sales as blockages ease

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PARIS, July 29 (Reuters) – Maybelline owner L’Oréal (OREP.PA) said on Thursday that sales growth accelerated in the second quarter in part due to the recovery in makeup sales in the States -United as COVID-19 lockdowns ease and salons use more professional products.

High-end fashion brands have benefited from booming Chinese and US demand in recent quarters, helping the revenues of luxury product groups like LVMH (LVMH.PA) to rebound, and L’Oréal posted similar trends as vaccination campaigns progress and people begin to socialize more. .

The French group, which also owns brands like Lancôme and makes Armani cosmetics, said sales of high-end fragrances were on the rise, while makeup revenues, which had been struggling for several years, recovered.

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New CEO Nicolas Hieronimus, a L’Oréal veteran who took the lead in May, told Le Figaro newspaper that sales of cosmetics and perfumes have not yet returned to pre-2020 levels, although the group’s overall revenues are now growing compared to 2019.

Certain divisions of L’Oréal which weakened relative to others, such as the consumer goods unit which houses products sold in supermarkets, benefited from the increase in make-up. The professional products division which sells to hairdressing salons also recorded a strong increase in its revenues.

L’Oréal had relied on its e-commerce business during last year’s shutdowns to reach consumers, who used hair care and skin creams, but store closings hurt sales.

Overall group sales reached € 7.6 billion ($ 9.03 billion) in the second quarter, up 33.5% excluding currency fluctuations and acquisitions. That was up from 10.2% like-for-like sales growth in the previous three months, and broke a consensus for 27.5% growth cited by Credit Suisse.

Hieronimus said in a statement that there will be more product launches in the second half of 2021.

Operating margins amounted to 19.7% of sales at the end of the first half, with operating income up 26.8% to € 3 billion.

($ 1 = 0.8418 euros)

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Reporting by Sarah White; Editing by Mike Harrison and Lisa Shumaker

Our standards: Thomson Reuters Trust Principles.


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