(Feb 13): L’Oréal SA shares fell after the French beauty group posted disappointing sales growth, held back by its luxury division and weakness in the region that includes China.
Sales rose 6% on a like-for-like basis in the fourth quarter (4Q), L’Oréal said on Thursday, lagging analysts’ expectations for an increase of about 6.5%.
L’Oréal’s top-line growth miss was “not helpful, considering its peers’ cautious commentaries in the beauty market and high expectations in the results,” said RBC Capital Markets analyst Wassachon Udomsilpa in a note.
The shares tumbled as much as 7.1% in Paris trading on Friday, the biggest intraday drop since October.
Results at the luxury division — with brands including Lancôme and Yves Saint Laurent — were hurt by a persistent slowdown in the travel retail business in Asia. Sales growth at L’Oréal Luxe, which is reliant on shoppers in airport boutiques, was well short of estimates.
L’Oréal’s chief executive officer, Nicolas Hieronimus, told reporters the company hadn’t expected the sluggish travel retail performance in the quarter, and believes the disruption will be temporary.
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Overall, 2026 is starting pretty well so far, he said, and he’s seeing more confidence among shoppers in China to buy premium products.
The results follow sluggish performances at smaller rivals Estée Lauder Cos and Coty Inc in the most recent quarter. The French company has proven more resilient to the consumer slowdown than peers because of its broad range of offerings, from specialist skincare products to mass-market makeup to pricey soaps and fragrances.
Still, the region that includes China — once a growth engine — posted sales that were much weaker than expected. Sales in North America and Europe, by contrast, topped estimates.
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The dermatological beauty unit was the best performer last quarter, with sales jumping 11.5%, helped by new product launches at CeraVe and strong demand for La Roche-Posay. Consumer products, the largest unit, posted sales growth of 4.8%, in line with estimates.
L’Oréal’s results follow a disappointing performance from the perfume and beauty division of Hermès International SCA earlier on Thursday. That unit faced a tough comparison basis with the launch of a fragrance that found strong success during the Christmas shopping season the prior year.
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