France's L'Oréal, maker of Maybelline and Lancome beauty products, has reported better-than-expected like-for-like sales growth for the first quarter, driven by its thriving luxury unit and demand in Asia.
The world's biggest cosmetics firm said sales between January and March reached €6.78 billion, a touch above the €6.75 billion forecast by analysts polled by Inquiry Financial for Reuters.
Like-for-like revenue growth, which strips out the effect of currency swings and acquisitions or disposals, was 6.8%, well above expectations of 5.6%.
On a reported basis, revenue was down 1% from a year earlier, L'Oréal said, as currency effects bit due to a strong euro.
Western Europe
The group’s Western Europe division posted relatively flat sales growth year-on-year, with like-for-like sales up 0.4%, and reported sales down 0.6%.
Like-for-like sales in North America were up 2.5%, and down 9.5% on a reported basis.
In terms of new markets, Asia Pacific, which registered a 21.1% increase in like-for-like sales, and Africa/Middle East, which posted a 18.3% increase, were the best performing geographic divisions for the firm.
Divisional Performance
"All the Divisions are growing," Jean-Paul Agon, Chairman and CEO of L'Oréal commented. "L'Oréal Luxe has delivered an impressive performance by accelerating its growth, thanks to the power of its four major global brands - Lancôme, Yves Saint Laurent, Giorgio Armani and Kiehl's - all posting growth of more than 10%.
"The Active Cosmetics Division, with double-digit growth, is driven by the success of its La Roche-Posay and SkinCeuticals brands, the new impetus of Vichy and the dynamism of CeraVe."
Agon added that the group's Consumer Products Division has started the year with "growth that is still moderate and sharply contrasted between the regions, with outstanding performances in China, a situation that is still difficult in France, and an improved sell-out in the United States."
The group's L'Oréal Paris brand is "performing well", he added, while the "gradual transformation of the Professional Products Division is producing its first positive results, held back however by the sluggishness of some major markets in Western Europe."
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
