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L’Oréal North Asia sales slowed by ‘destocking’ in mainland China

French cosmetics group L’Oréal announced on Wednesday a 14.6 percent sales uptick for the first quarter to EUR 10.38 billion (USD 11.37 billion), despite sales growth slowing in the company’s North Asia region.

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L’Oréal North Asia recorded sales growth of 1.9 percent like-for-like and 1.1 percent reported to EUR 2.8 billion during the three months. In North Asia, the beauty market remained “dynamic” in Japan and South Korea, but declined in mainland China at the very beginning of the year, due to Covid-19 restrictions, which led to destocking in January.

From February, Chinese consumer demand for beauty did resume, as did footfall in brick-and-mortar. The gradual resumption of travel allowed Hong Kong, Macau and Hainan to welcome an increasing number of tourists, which L’Oréal could “seize,” it added.

In Japan and South Korea, L’Oréal said it “significantly outperformed” the market and maintained strong momentum, driven by its consumer products division and strong growth of L’Oréal luxe.

The dermatological beauty and professional products divisions recorded a “very strong performance” in the zone, said L’Oréal.

“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,” said Nicolas Hieronimus, CEO of L’Oréal.

“This performance, which has yet to benefit from China’s reopening, demonstrates the strength of L’Oréal’s balanced multipolar model. I am thrilled to soon welcome the magnificent Aēsop brand and its teams, which will reinforce L’Oréal luxe.
Mindful of the current uncertainties, we remain optimistic about the outlook for the beauty market, ambitious for the future and confident in our ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023.”