Cosmetics giant L’Oréal has posted first-quarter sales growth ahead of expectations as consumers in key markets continued to buy more high-end beauty products despite inflation and economic concerns linked to the war in Ukraine.
The French group’s overall like-for-like sales climbed 13.5% to €9.06bn over the period to 31 March, with double-digit growth in Europe (16.4%) and North America (12.6%) as they recovered from the impact of lockdowns in the same period last year.
This was driven by its Active Cosmetics division, which includes the Vichy and CeraVe labels, which saw sales jump 18%. L’Oréal largest division, L’Oreal Luxe, which sells brands such as Giorgio Armani and Lancome, clocked 17.5% growth. Meanwhile, its Consumer Products unit grew sales by 6.9% despite supply-chain challenges.
“We are not even close to experiencing a luxury down-turn, we see many people that are affluent and even the middle classes want to indulge,” said Chief Executive Nicolas Hieronimus.
“The overall demand for luxury products and premiumized products is very high – the market is premiumizing overall.”
Executives also struck an optimistic note on China despite recent Covid lockdowns weighing on store traffic. The market still recorded double-digit growth, aided by strong demand online.
Asked how the company is assessing risks in Russia, where it temporarily closed stores and counts 2,200 employees and a production plant, Hieronimus said he was keeping a close eye on reactions from consumers and employees, even if the group’s position was “very well understood and very well accepted.”
Looking ahead, Hieronimus said: “While mindful of volatility and uncertainty, we remain optimistic about the outlook for the beauty market and confident in our ability to outperform the market in 2022 and achieve another year of growth in sales and profits.”
