L’Oréal reported a 14-per-cent increase in first-quarter sales, as a weaker euro helped compensate for "sluggish" growth in Western Europe, sending shares of the world’s largest cosmetics maker higher.
Revenue reached €6.44 billion, the Paris-based maker of Maybelline eyeshadow said in a statement after markets closed.
Analysts predicted €6.35 billion, according to the median of estimates compiled by Bloomberg. The strength of currencies such as the dollar boosted the value of revenue from abroad.
L’Oréal, which has made a dozen acquisitions since 2013, is benefiting from the euro’s slump after currencies weighed on performance in the past two years.
Sales growth, which was led by the luxury and active-cosmetics divisions in the first quarter, will probably accelerate this year, as the consumer unit starts to feel the effects of a rebound in North America, chairman Jean-Paul Agon said on a call with analysts.
The report led analysts such as Alex Howson at Jefferies to raise their full-year earnings estimates. The biggest boost came from foreign exchange, according to Howson, who added 2.1 per cent and 3.3 per cent to per-share predictions for the current financial year and the one following that, respectively.
Excluding acquisitions, disposals and currency swings, sales climbed 4 per cent in the quarter. The median analyst estimate was for growth on that basis of 3.9 per cent.
All divisional sales came in ahead of estimates on a like-for-like basis, except the consumer-products unit, where a 1.7-per-cent gain was shy of the 2.6 per cent predicted by analysts.
L’Oréal attributed the underperformance at the unit that makes Garnier shampoo to Europe.
Europe, the source of about a third of revenue, “has had a difficult start to the year,” L’Oréal said, citing a slight decline in the mass market in the region.
“In an economic context that is still volatile, we confirm that we are confident in our ability to outperform the market this year, once again, and to achieve growth in sales and profit,” L’Oréal said.
News by Bloomberg, edited by ESM
