Momentum in the key North Asia travel retail sector saw what French beauty products powerhouse L’Oréal called “gradual improvement” during the third-quarter and nine-month periods ended 30 September.
North Asia embraces the historically critical South Korean and Hainan off-shore duty-free markets, both of which have been heavily impacted by softened Chinese spend and official crackdowns on daigou trading in recent times.
Travel retail’s improvement in the region can be guaged by North Asia’s Q3 numbers with like-for-like sales up +4.7% year-on-year (-0.1% reported), compared with +0.5% (-1.1%) for the first nine months. We’ll bring you more details and analysis after the post-earnings conference call.
Revenue rose +3.4% like-for-like to €32.80 billion (+3.7% adjusted and +1.2% reported), with momentum accelerating across the board between the first six and nine months.
Groupwide, L’Oréal posted continued acceleration in like-for-like sales growth across all divisions and regions for the nine months.
Divisional growth was driven by enhanced across the board momentum in Q3 while the regional performance was boosted by continuing recovery in North America and Mainland China.
Standouts included continued strong momentum in haircare and fragrances with makeup sequentially improving.
Growth came in both volume and value terms with a strong contribution from product mix. Online sales rose by double-digits, well ahead of the market.
The company also reaffirmed the crucial importance of its newly announced long-term strategic partnership in luxury beauty and wellness with Kering.
L’Oréal CEO Nicolas Hieronimus said, “As anticipated, our like-for-like growth continued to sequentially accelerate, reaching +4.9% in the third quarter.
“Progress was broad-based. All regions contributed: the recovery in our two largest markets – the USA and Mainland China – continued; in a solid market, Europe remained robust; and ongoing strength in SAPMENA-SSA more than offset the softness in Latin America.
“Growth accelerated across all divisions, as the weight of new launches further increased in the third quarter fuelled by our Beauty Stimulus Plan.
“The global beauty market remains dynamic with a progressive improvement in luxury. Our strength online allows us to outperform what is today the most dynamic channel.
“We just announced a strategic alliance with Kering, one of the world’s most creative and visionary luxury groups. I am delighted by this partnership: the acquisition of Creed will make us one of the leading players in niche fragrances; and I see enormous potential for growth for the beauty and fragrance licences of Gucci, Bottega Veneta and Balenciaga, all truly exceptional couture brands.
“This partnership will further solidify our position as the world’s leading luxury beauty company. As we head into the last quarter of the year, I am confident that we will continue to outperform the global beauty market and to achieve another year of growth in sales and an increase in our profitability.” ✈
