L’Oréal Returns to Pre-Pandemic Growth in H1 – WWD

PARIS — L’Oréal returned to its pre-COVID-19 progress price within the first half of 2021, following an acceleration of gross sales within the second quarter of the 12 months that beat analysts’ expectations.

The maker of Lancôme, Kiehl’s and L’Oréal Paris merchandise registered a 29.6 p.c gross sales improve in reported phrases to 7.58 billion euros. On a like-for-like foundation, gross sales rose 33.5 p.c.

“By the top of June, the group posted a really robust improve and returned to its pre-COVID-19 progress price, up 6.6 p.c like-for-like in comparison with the primary half of 2019, with an acceleration of 8.4 p.c within the second quarter in comparison with 2019,” stated Nicolas Hieronimus, chief govt officer of L’Oréal, in an announcement launched Thursday after the shut of the Paris Bourse.

L’Oréal notched up market-share features in all of its divisions and geographic zones.

“The Skilled Merchandise Division has efficiently remodeled its enterprise mannequin and achieved report efficiency. The Client Merchandise Division recorded double-digit progress within the second quarter, thanks specifically to the restoration of make-up,” Hieronimus summarized. “L’Oréal Luxe additionally noticed a pointy rise in perfume gross sales and considerably outperformed the market. The Lively Cosmetics Division achieved report progress, demonstrating that its model portfolio is completely tailored to customers’ well being and beauty aspirations.”

“Second-quarter like-for-like progress of 33.5 p.c got here in forward of consensus (up 30.0 p.c) with three out of the 4 divisions beating handsomely on a year-on-year foundation (led by Skilled Merchandise, up 66 p.c) and — extra importantly, a two-year stack (led by continued robust progress in Lively Cosmetics, up 55 p.c, adopted by Skilled, up 13 p.c, and Luxe, up 10 p.c),” wrote Eva Quiroga, managing director at Financial institution of America, in a observe.

The one division that fell wanting expectations was Client Merchandise, which was up 14 p.c year-on-year and down 3 p.c on a two-year stack.

“Whereas the acceleration in progress was thanks ‘specifically to the restoration of make-up,’ the market might have gotten a bit forward of itself on the magnitude/timing of the make-up restoration,” wrote Quiroga.

Every of L’Oréal’s geographic zones registered double-digit gross sales features.

“North Asia continued to carry out nicely, nonetheless pushed by mainland China, the place L’Oréal continues to strengthen its undisputed management, whereas North America noticed a return to progress with great acceleration within the second quarter,” Hieronimus stated, referring to the 44.7 p.c like-for-like acquire.

“In Europe, L’Oréal considerably outperformed the market, which is beginning to get well regularly; all international locations on this zone are rising, led by the UK, France and Russia. The group carried out nicely in SAPMENA-SSA [or South Asia Pacific, Middle East, North Africa and Sub-Saharan Africa] and in Latin America, with a marked development in Brazil,” he stated.

Within the six months ended June 30, L’Oréal’s working revenue was 2.99 billion euros, up 26.8 p.c year-on-year. The group’s working margin equaled 19.7 p.c, in keeping with analysts’ expectations. Nevertheless, they highlighted that the margin was forward 170 foundation factors following 210 foundation factors of incremental promoting and promotion bills, which got here out as 32.6 p.c of gross sales — a historic excessive.

L’Oréal’s gross sales within the first half have been 15.2 billion euros, up 16.2 p.c in reported phrases and 20.7 p.c on a like-for-like foundation.

Within the interval, e-commerce represented 27.3 p.c of the corporate’s whole gross sales. L’Oréal’s journey retail enterprise bounced again, due to a slight restoration in worldwide journey and powerful enterprise in Hainan, the island in China that’s grow to be a tax-free purchasing mecca.

Hieronimus, who will lead a digital convention with analysts and journalists on Friday morning to debate the outcomes, stated L’Oréal is well-positioned to proceed to develop at its pre-crisis tempo.

“We’re greater than assured than ever in our means to outperform the market and obtain a 12 months of progress in each gross sales and outcomes,” he stated.


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https://wwd.com/beauty-industry-news/beauty-features/loreal-returns-pre-covid-growth-in-h1-1234890587/ | L’Oréal Returns to Pre-Pandemic Development in H1 – WWD

Huynh Nguyen

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