L'Oréal's third-quarter sales reported a moderate rise of 2.8%, less than half of the previous quarter's growth, with a significant dip observed in North Asia. The global beauty giant's largest division, the mass cosmetics business, shifted from growth to decline, signaling potential challenges in the beauty market.
L'Oréal, headquartered in France, released its financial figures for both the third quarter and the first nine months of 2024. Over the first nine months, sales totaled €32.406 billion, marking a 6% increase. During the third quarter alone, sales were €10.285 billion, falling short of analysts' expectations of €10.57 billion.
Same-store sales grew by 6% over the first nine months, with a 3.4% rise in the third quarter, again underperforming analysts' predicted 5.88% growth.
In terms of specific business sectors, the mass cosmetics division saw a sales decrease of 0.6% in the third quarter to €3.748 billion, while same-store sales grew by just 1.4%. Meanwhile, the luxury cosmetics segment reported an 8% rise in third-quarter sales to €3.775 billion, with same-store sales up by 5.8%.
The dermatology-focused skincare division encountered a 1.6% drop in third-quarter sales to €1.6 billion, alongside a marginal same-store sales increase of 0.8%. Conversely, professional haircare products enjoyed robust growth, with sales up 4.8% in the third quarter to €1.163 billion and same-store sales jumping 6.1%.
From a regional market standpoint, sales varied significantly. Europe's sales climbed 5.2% in the third quarter, while North American sales rose 4.3%. On the contrary, North Asia recorded a sales decline of 4.4%, and same-store sales fell by 6.5%, reflecting challenging conditions in parts of Asia, including China.
Following the financial report, L'Oréal's stock initially rose by nearly 0.8% but later plunged, reaching a daily low and closing with about a 3% loss.
Overall, L'Oréal's sales growth in the third quarter fell significantly short of the second quarter's 6.7% rate. The mass cosmetics and dermatology-focused skincare divisions both experienced downturns. However, the company's CEO noted that while adverse weather impacted sun care products, other sectors like haircare and fragrances showed resilience, with Maybelline leading innovations in the cosmetics business.
