L'Oréal Rallies As Quarterly Results Offset China Concerns
L'Oréal's shares rose on Friday after fourth-quarter figures from the French cosmetics company allayed concerns over the impact of China's coronavirus health crisis on its business.
Late on Thursday L'Oréal said that fourth-quarter revenue had risen 11.4% to €7.9 billion, lifting its share price by 2.7% in early trading on Friday.
L'Oréal said China's coronavirus crisis would have only a short-term hit on the company's Asian business, which is its biggest sales driver.
L'Oréal's Chief Executive Jean-Paul Agon said the health scare would have "a temporary impact on the beauty market in the region and therefore on our business in China and travel retail in Asia, even if it is too early to assess it."
Asia Pacific accounts for nearly 35% of L'Oréal's revenue.
The group had 12,000 direct employees in China, Agon said in an interview with France's Les Echos interview on Thursday, and another 12,000 worked selling its brands in shops.
Its Chinese sites that were closed during extended Lunar New Year holidays were due to reopen on Monday, Agon said, though he did not specify what these were and whether they included factories.
For the whole of 2019, L'Oréal's net profit rose 9.3% to €3.98 billion, and its operating margin increased to 18.6%, from 18.3% a year earlier.
Agon said L'Oréal was confident of outperforming the broader beauty market in 2020. It grew around 5.5% in 2019, according to L'Oréal estimates.