In Trends

L’Oréal sales leap forward in 2018 on strong China demand

L’Oréal

Cosmetics and beauty group L’Oréal said fiscal 2018 proved to be its best year of growth since 2007, with annual comparable accelerating after strong fourth-quarter sales increases, particularly driven by China.

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For the twelve months ending December 31, L’Oreal sales totalled 26.9 billion euros, up 7.1% on a like-for-like basis or 3.5% based on reported figures.

L’Oréal saw all its divisions grow, especially its L’Oréal Luxe and Active Cosmetics segments, which both recorded double-digit growth, with the latter posting its highest growth in more than ten years thanks to a “very dynamic skincare market.”

In the luxury sector, Lancôme sales crossed the 3 billion euro mark, while mass-market brands such as L’Oréal Paris and Maybelline New York proved to have “a good year.”

In a press release outlining the results, the French beauty giant’s CEO said performance by geographic zone remained “differentiated.”

“In Western Europe, progress was held back by difficulties in some markets, while growth in North America improved compared with the previous year,” said Jean-Paul Agon, Chairman and CEO of L’Oréal.

“The New Markets achieved their best performance since 2007, and the Asia Pacific Zone, driven by China, has now overtaken North America with sales exceeding 7 billion euros. “

Sales in China contributed to the best performance in 40 quarters for the Paris-based maker of international beauty products.

“The strong Chinese consumer continues to drive growth with no signs of a slowdown and L’Oréal is capturing its fair share,” analysts said in a note to clients.

Online sales grew 40.6% in 2018, and now accounts for 11% of group sales, while Travel Retail broke the 2 billion euro barrier with an increase of 27.1%.

Gross margins increased significantly and operating profit reached 4.92 billion euros, standing at 18.3% of sales

Net profit registered as 3.89 billion euros, an increase of 8.8%, while earnings per share came in at 7.08 euros, an increase of 6.5%.

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“In an economic context that remains volatile and uncertain, we are confident, thanks to our innovations, powerful brands, digital excellence and in particular our outstanding teams all over the world, that we can pursue our corporate social responsibility commitments, outperform the beauty market in 2019 and achieve another year of growth in both sales and profits,” concluded Agon.

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