The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
L’Oreal SA sales climbed as demand for makeup bounced back and the strength of its luxury products offset the negative impact of Covid-19 restrictions in China.
Overall sales rose 13% on a comparable basis in the second quarter, the French company said. Analysts expected a gain of 9.7%. The company’s stock rose more than 2% in early trading.
L’Oreal Luxe became the group’s biggest unit last year, surpassing its mass-market consumer products division, which sells Maybelline New York mascara as well as Garnier shampoo. Consumers have been spending more on premium beauty brands such as Helena Rubinstein creams and Saint Laurent fragrances. The luxury arm grew 15%.
Investors have been watching to see whether consumers are starting to feel the pinch from higher inflation and buying cheaper products. The company said it’s confident it will outperform this year.
Shifting shoppers to pricier, premium brands is helping L’Oreal weather its own cost inflation as companies grapple with rising energy, fuel, raw materials and labor expenses. The company said innovation was helping it absorb higher costs while still investing in its brands.
L’Oreal’s operating margin rose to 20.4% in the first half, up 70 basis points. Chief Executive Officer Nicolas Hieronimus is set to provide more details during a presentation.