L’Oreal sales rise as lower-priced cosmetics gain ground

L’OREAL sales climbed as consumers continued to buy the cosmetic giant’s mass-market makeup and skincare products, despite soaring inflation.

Overall sales rose 9.1 per cent on a comparable basis in the third quarter, the French company said late on Thursday (Oct 20). In a reversal of roles, performance at the company’s mass-market consumer-products arm, which sells Maybelline New York mascara and Garnier shampoos, outperformed its luxury arm. It’s sign that well-to-do consumers may be trading down to more inexpensive brands.

“Consumers’ appetite for beauty products is intact,” chief executive officer Nicolas Hieronimus said in a statement. L’Oreal flagged makeup in its consumer-products division, which made “spectacular” gains in India and Mexico. Comparable sales at the company’s active cosmetics and North American divisions also beat expectations.

The L’Oreal Luxe division, which includes brands such as Lancome Paris, Kiehl’s and Ralph Lauren, took a hit in the third quarter from issues including lockdowns in China and sourcing snags.

L’Oreal is showing resilience despite soaring inflation and a worsening global economic outlook. The report follows earnings earlier Thursday from French distiller Pernod Ricard, which reported better-than-expected sales growth as the Jameson whiskey maker raised prices and travel retail continued to rebound. French fashion house LVMH Moet Hennessy Louis Vuitton also recently reported robust sales as demand for their clothes, handbags, perfumes, wines and spirits jumped.

In that context, investors may be concerned by the slowdown at L’Oreal Luxe, which recently surpassed the company’s mass-market division to become the group’s largest and has driven growth in recent quarters.

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L’Oreal shares have slumped this year amid a broad retreat in global markets, falling 21 per cent through Thursday’s close. BLOOMBERG