L'Oréal Posts Strong Fourth Quarter, Boosted By Premium Brands
L'Oréal SA’s high-end cosmetics such as Lancome Monsieur Big mascara came through again over the holidays.
Fourth-quarter revenue rose 5.5 percent on a comparable basis, the Paris-based cosmetics company said Thursday, with luxury products leading the way for the sixth consecutive quarter.
That was above analysts’ estimate of 4.9 percent.
Demand For Luxury
A global rebound in demand for luxury goods is a boon for L'Oréal as growth has faltered in the company’s mass-market division, which makes up nearly half of sales.
Consumers who used to pick up Garnier shampoos and L'Oréal Paris night cream at the drugstore are increasingly tempted by smaller brands.
L'Oréal Luxe “is delivering spectacular growth, particularly in Asia,” Chief Executive Officer Jean-Paul Agon said in a statement.
Sales in L'Oréal’s luxury division rose 9.8 percent in the fourth quarter, while the professional division -- which sells to salons -- lagged behind with 2 percent growth and the consumer division grew 3 percent.
"Growth in the Consumer Products Division is being slowed by the continuing difficulties of the American and French markets, while sales in the Professional Products Division improved at the end of the year," Agon added.
"Today more than ever, L'Oréal can rely on its unique portfolio of powerful and complementary brands, eight of which now have sales above one billion euros."
Full-year operating profit rose 3 percent to 4.7 billion euros ($5.8 billion) and the company posted a record operating margin of 18 percent.