French beauty products giant L’Oréal posted a +1.6% rise (reported; +3.0% like-for-like) in H1 revenues to €22,473.3 million. Q2 saw a -1.3% decline (reported; +2.4% like-for-like) to €10,738.6.
Net profit excluding non-recurring items rose +1.0% to €3,783.0 million.
We will bring you analysis of the results, including the group’s travel retail performance, following today’s earnings call.
By region, emerging markets advanced in double digits while, importantly, Mainland China returned to growth (adjusted for phasing related to the 2024 and 2025 IT transformation.
By region, SAPMENA-SSA (South Asia Pacific, Middle East, North Africa, Sub-Saharan Africa) – +9.2% reported and +10.4% like-for-like – and Latin America (+10.3% like-for-like) shone with only the troubled North Asia region (-1.1%) declining on a like-for-like basis. North Asia fared worse in Q2 with sales falling -8.8% like-for-like and -11.3% reported.
All divisions grew, led by Professional Products. Consumer Products started to see early signs of recovery in North America, including makeup.
Fragrances and haircare continued to be the fastest-growing categories.
At 21.1%, the operating margin increased by 30 basis points. All divisions reported margins above 22%.
L’Oréal CEO Nicolas Hieronimus said: “As anticipated, L’Oréal’s like-for-like growth accelerated between first and second quarter*.. The ongoing strength in emerging markets, the slight rebound in Mainland China and the gradual recovery in North America more than offset the expected slowdown in Europe, once again validating our multi-polar model.
“The acceleration was supported by a gradual improvement in global beauty market growth, which we expect to continue in the next two quarters. And it was boosted by the early success of our Beauty Stimulus Plan – which will become ever more impactful as we continue to roll out our most recent blockbusters and as we have many exciting launches in the second half of the year.
“Our operating margin increased by 30 basis points in the first half, particularly thanks to rigorous management of our operating expenses. Our numerous initiatives in the second half will benefit from strong brand support, notably our major upcoming launches, including the new Prada men’s fragrance and the first Miu Miu fragrance (in early 2024 L’Oréal and Prada signed a worldwide long-term license agreement for the creation of Miu Miu luxury beauty products).
“I am confident that we will continue to outperform the global beauty market – which we expect to grow, even amidst the current economic and geopolitical tensions – and to achieve another year of growth in sales and an increase in our profitability.” ✈
* Adjusted for the phasing related to the 2024 and 2025 IT transformation.
