L’Oréal reported a 7.5 percent increase in sales to EUR 22.12 billion for the first half, citing growth in all product categories and regions, except for North Asia.
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The French beauty giant’s embattled North Asia region clocked widening sales declines in the first half, down 3.1 percent, following a 0.3 percent dip in 2023. The company said operating conditions in China “remained challenging,” adding that beauty market on the mainland was negative in the second quarter on a tough comparison base, exacerbated by lasting low consumer confidence.
Travel retail in North Asia continued to weigh on growth in the first half, with momentum improving sequentially. Japan maintained double-digit growth, benefiting from the return of tourism, added the Paris-based firm,
By division, North Asia growth was led by dermatological beauty, including CeraVe, Skinceuticals and La Roche Posay, with all brands contributing, as well as by professional products, thanks to the ongoing success of Kérastase. Consumer products recorded low single-digit growth, driven by L’Oréal Paris and Maybelline New York.
However, L’Oréal luxe, including Aesop, Lancôme, and Armani Beauty, among others, was hampered by the “depressed market” in mainland China and travel retail but progressed well in other parts of the region, with the “couture brands” the best performers.
Contrastingly, sales in the company’s South Asia and the Middle East/North Africa zone saw a 14.3 percent surge in growth, on a solid performance across all categories and divisions.
By country, key growth contributors were the Australia-New Zealand cluster, Thailand, Saudi Arabia, and India.
By division, dermatological beauty, lead by CeraVe, had “another outstanding performance,” as well as consumer products, and luxe, where Yves Saint Laurent and Prada were the main growth contributors.
Fragrances remained the fastest-growing category, boosted by new launches, while skincare grew well, thanks to dermatological beauty and consumer products. Haircare was driven by “premiumisation” in both the consumer and professional channels.
Online remained particularly dynamic across the region, notably in South-East Asia and India, the company added.
Total company net profit for the first half grew 8.8 percent, to EUR 3.65 billion.
“In the first half, we delivered strong growth of 7.3 percent, well-balanced between value and volume and strengthened our global leadership in a beauty market that remains dynamic,” said Nicolas Hieronimus, CEO of L’Oréal.
“Our continued strong momentum in emerging markets, Europe and North America allowed us to more than offset the depressed beauty market in mainland China and the unfavourable comparative in travel retail. In this context, I am particularly pleased to see the acceleration of L’Oréal luxe, the dynamism of consumer products and the continued share gains of dermatological beauty and professional products.”
Earlier this year, L’Oréal announced it had made a minority investment in prestige Chinese perfume house To Summer, as it homes in on the Asian fragrance market.