L'Oreal reported quarterly revenue of €11.6 billion for the three months ending June, registering a 6.3% increase on a like-for-like basis after accounting for the phased implementation of a new IT system. The result edged past a Visible Alpha consensus expectation of 5.7% growth.
The Paris-headquartered group said the uptick was supported by strong consumer uptake of recently launched haircare items and mascaras. L'Oreal, whose brand roster ranges from mass-market names such as L'Oreal Paris and Maybelline to specialist skincare CeraVe and designer fragrances including Valentino, said its broad portfolio helped it maintain momentum across price points.
Growth moderated from the 6.7% like-for-like expansion recorded in the first quarter, reflecting tougher year-on-year comparisons. Nonetheless, the companys largest segment - comprising its mass-market channels - outpaced expectations. Management highlighted particularly robust haircare sales and what it called "a remarkable outperformance online," which bolstered results in Europe.
Regional performance was mixed but positive: adjusted like-for-like sales in Europe rose 6.7%, while North America increased 5.9%. In April, CEO Nicolas Hieronimus referred to the so-called "lipstick effect" - consumers purchasing cosmetics to boost mood during stressful economic times - as a factor supporting demand in Europe amid cost-of-living pressures.
In the luxury division, which accounts for roughly one-third of group sales, growth came in at 4.7%, below consensus forecasts. L'Oreal noted that ongoing difficulties in China's travel retail market continued to weigh on that division, even as it recorded double-digit expansion in mainland China.
The company also faces competitive context: peer Unilever reported underlying sales growth of 8% in its beauty and wellbeing unit for the quarter. L'Oreal's shares were described as being up 4% year to date.
The quarterly update underscores a split performance across channels and segments - with mass-market and online strength offset by softer luxury travel retail - as L'Oreal navigates varying regional consumer dynamics and the operational adjustments tied to its new IT rollout.