L’Oréal Q4 Sales Rise 2.5%, Miss Expectations
PARIS – L’Oréal’s fourth-quarter sales growth missed expectations due to factors including the ongoing weakness in China, a slowdown in North America and the Luxe division’s performance.
The maker of Kiehl’s, Lanc?me and Garnier products said in a statement released after market close Thursday that its sales in the three months ended Dec. 31, 2024, reached 11.08 billion euros, up 4.5 percent in reported terms and 2.5 percent on an organic basis.
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Expectations had been for 3.9 percent like-for-like growth, according to VisibleAlpha consensus.
L’Oréal’s fourth-quarter organic sales gains slowed versus the third quarter’s 3.4 percent and the second quarter’s 5.3 percent.
In the most recent quarter in North America, company sales rose 1.4 percent, while in North Asia, they softened by 3.6 percent. The Luxe division’s sales increased 1 percent.
The beauty giant also said Thursday it had taken a minority stake in Amouage, the high-end fragrance brand based in Oman.
L’Oréal sales for full-year 2024 reached 43.49 billion euros, a 5.6 percent rise in reported terms and 5.1 percent on a like-for-like basis. In a statement, Nicolas Hieronimus, L’Oréal chief executive officer, noted the group had once again outpaced the global beauty market.
“Excluding North Asia, where the Chinese ecosystem remained challenging, sales advanced in high single digits,” he said.
The executive said L’Oréal sharpened its portfolio with the acquisitions of the Miu Miu beauty license and Korean skin care brand Dr. G, as well as minority stakes in pure-play dermatology leader Galderma and Amouage.
“This will allow us to go ever faster and further in our conquest of new beauty spaces: geographic, demographic and highly promising technologies that offer innovative science-based beauty solutions to the customer of tomorrow,” said Hieronimus.
L’Oréal remains optimistic about the outlook of the global beauty market and confident in its own ability to continue outperforming it with another year of sales and profit growth.
“We expect growth to accelerate progressively, supported by our beauty stimulus plan, which will be driven by an exciting pipeline of new launches and continued strong brand support,” said Hieronimus.
But the jury is out.
“With market growth remaining below the longterm trend in 2H24, comments on [L’Oréal’s] global beauty market growth expectations and the company’s ability to outperform will be widely watched, particularly in the context of consensus expectations of 5.2 percent [like-for-like] growth next year,” Jefferies equity analyst Molly Wylenzek wrote in a note.
“All in all, the shares may open slightly lower tomorrow due to concerns over the softer-than-expected Q4 [like-for-like] for Luxe,” wrote Rogerio Fujimori, an equity research analyst at Stifel, in a note. “However, margin performance was reassuring, [like-for-like] momentum should improve as 2025 progresses, and we envision no material changes to FY25 consensus estimates.”
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