L’Oreal SA sales climbed as the cosmetics giant benefited from higher demand for its luxury products, weathering COVID-19 restrictions in China.
Sales rose almost 14 percent on a like-for-like basis in the first quarter of this year, the French company said late on Tuesday, beating analyst estimates.
Three of the four main divisions grew by double-digit percentages.
Photo: Reuters
The luxury unit, which includes skincare brands like Helena Rubinstein and Yves Saint Laurent perfume, grew by almost 18 percent. Total sales at the premium unit surpassed the mass-market consumer products business for the first time last year. The latter unit grew 6.9 percent during the quarter.
L’Oreal experienced supply issues that would not be fully solved by the second quarter, chief executive officer Nicolas Hieronimus told analysts in a call.
He forecast that the beauty market would grow 4 and 5 percent this year, with L’Oreal outperforming this growth.
L’Oreal would be able to fully offset the input cost increases of its products, which would affect its gross margin in the first half, chief financial officer Christophe Babule said during the call.
That is despite measures to increase product prices, especially for new launches, as well as a reduction of advertisement and promotional spending as a percentage of total sales, he said.
L’Oreal in China had double-digit percentage growth during the first quarter, outperforming the market in the country thanks to marketing campaigns for the Lunar New Year, Valentine’s Day and Women’s Day, the statement said.
Although current lockdowns are affecting demand, Babule said he is confident that Chinese consumers’ appetite for cosmetics can recover quickly once virus restrictions ease, as happened two years ago.
Hieronimus said the group is still selling essential products in Russia.
“We’re taking all the appropriate measures to offset any reputational risks” related to the company’s presence there, he added. “Should the situation warrant it, we’ll make adjustments.”
Last month, L’Oreal announced that it was temporarily shutting stores as well as its e-commerce site in Russia, even though its plant near Moscow remained open for business. Russia represents about 1.5 percent of total sales for L’Oreal.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Meta Platforms Inc offered US$100 million bonuses to OpenAI employees in an unsuccessful bid to poach the ChatGPT maker’s talent and strengthen its own generative artificial intelligence (AI) teams, OpenAI CEO Sam Altman has said. Facebook’s parent company — a competitor of OpenAI — also offered “giant” annual salaries exceeding US$100 million to OpenAI staffers, Altman said in an interview on the Uncapped with Jack Altman podcast released on Tuesday. “It is crazy,” Sam Altman told his brother Jack in the interview. “I’m really happy that at least so far none of our best people have decided to take them
PLANS: MSI is also planning to upgrade its service center in the Netherlands Micro-Star International Co (MSI, 微星) yesterday said it plans to set up a server assembly line at its Poland service center this year at the earliest. The computer and peripherals manufacturer expects that the new server assembly line would shorten transportation times in shipments to European countries, a company spokesperson told the Taipei Times by telephone. MSI manufactures motherboards, graphics cards, notebook computers, servers, optical storage devices and communication devices. The company operates plants in Taiwan and China, and runs a global network of service centers. The company is also considering upgrading its service center in the Netherlands into a
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
RSS