French cosmetics group L'Oréal reported a 13% rise in first quarter sales, beating expectations thanks to strong business in the United States and Europe as shoppers shrugged off rising prices, but said it had not benefited yet from the end of COVID-19 curbs in China.
Sales of the French cosmetics group, which sells brands ranging from Maybelline to Lancome, came to €10.38 billion ($11.37 billion) over the first three months to the end of March.
The 13% increase on an organic basis beat analyst expectations for 8.1% growth according to a consensus estimate cited by Barclays.
Sales in Europe and North America grew by 16% and 16.6% respectively, with the company flagging a strong performance from its consumer products, which has been moving upmarket, as well as its dermatological beauty division, which sells CeraVe skincare.
In mainland China, where the company said luxury sales were flat due to low inventories, consumer demand and store traffic resumed from February.
Earlier this month, L'Oréal agreed to buy Australian luxury brand Aesop for an enterprise value of $2.53 billion, its largest brand acquisition to date, with an eye to international expansion, including in China.
'An Excellent First Quarter'
Nicolas Hieronimus, CEO of L'Oréal, said, "In a beauty market that remains very dynamic, L’Oréal has maintained strong growth momentum and posted an excellent first quarter [..]. Boosted by valorised innovations in all divisions and the engagement of our teams around the world, L’Oréal has outperformed the market in all geographic zones and strengthened its leadership position. This performance, which has yet to benefit from China’s reopening, demonstrates the strength of L’Oréal’s balanced multipolar model."
Hieronimus added that the company remains optimistic about the outlook for the beauty market despite being mindful of mindful of the current uncertainties.
L'Oréal is confident in its ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023.