Moodie Davitt snapshot: L’Oréal Q1 2018 sales results 
 Total sales = €6.78 billion
– Sales up +6.8% like-for-like or -1% on a reported basis
 New Markets +14.9% like-for-like
– E-commerce sales +33.8%
Source: The Moodie Davitt Report

L’Oréal’s Q1 2018 sales amounted to €6.78 billion, up +6.8% like-for-like and -1% on a reported basis.

The company’s Active Cosmetics and L’Oréal Luxe divisions posted the strongest gains. L’Oréal Luxe growth (+14% like-for-like and +4.4% reported) was driven by Asia and travel retail.

L’Oréal Chairman & CEO Jean-Paul Agon commented: “The L’Oréal group has started 2018 with very dynamic like-for-like growth, which continues to reflect sharp contrasts. All the divisions are growing. 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. The Consumer Products Division has begun 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 USA. L’Oréal Paris is notably performing well across all its categories.

“The L’Oréal group has started 2018 with very dynamic like-for-like growth, which continues to reflect sharp contrasts” – L’Oréal Chairman & CEO Jean-Paul Agon

“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.

“For the full year, we are confident in our ability to outperform the market and achieve significant growth in our like-for-like sales”

“In geographic terms, the highlight of the first quarter is the return to strong growth in the New Markets, especially in Asia Pacific, where, in China, consumers’ aspirations for iconic brands remain just as strong. The group’s digital acceleration has moved up a gear with the acquisition of the Canadian company ModiFace, which provides the most innovative technologies to enhance services and the beauty experience for all our brands.

“Furthermore, e-commerce sales at +33.8% continue to increase rapidly, and now account for 8.8% of sales. In a currency context that remains unfavourable, the first quarter demonstrates the vitality of our organic growth, auguring well for the future. For the full year, we are confident in our ability to outperform the market and achieve significant growth in our like-for-like sales, while increasing our profitability.”

 

Regional performance

Western Europe

The region recorded +0.4% like-for-like growth (down -0.6% on a reported basis). L’Oréal Luxe’s positive start to the year was driven by Giorgio Armani fragrances and Kiehl’s facial skincare. The Active Cosmetics Division is outperforming its market, due in part to the dynamism of La Roche Posay. The Consumer Products Division is maintaining its growth momentum in make-up, but L’Oréal Paris has been affected by a challenging comparison base in terms of launch plan, said L’Oréal.

North America sales increased +2.5% on a like-for-like basis while reported figures were down -9.5%. Consumer Products won market share at the start of the year and L’Oréal Paris performed strongly due to the relaunch of Elvive in haircare.

L’Oréal Luxe is maintaining its growth through Lancôme, Yves Saint Laurent, Giorgio Armani and Kiehl’s. Urban Decay posted a slowdown in sales. The Professional Products Division’s sales are increasing due to the dynamism of the Redken and Matrix brands. The Active Cosmetics Division is winning market share and posting double-digit growth, driven by the outstanding performance of CeraVe and the acceleration of the SkinCeuticals and La Roche-Posay brand, noted L’Oréal.

Asia Pacific sales rose +21.1% like-for-like and +10% on a reported basis. Sales gains were driven by Northern Asia, specifically China and Hong Kong, where all the divisions are growing. The Active Cosmetics Division’s skincare brands are performing “very well” across the whole zone. Growth in Southern Asia is solid, especially in India, according to L’Oréal.

Vichy’s strong performance in Latin America was driven by ‘daily booster’ Minéral 89, which launched in July last year

Latin America has remained stable, at +0.2% like-for-like and -10.1% reported, put at a disadvantage by the Consumer Products Division in Brazil. Professional Products achieved an ‘excellent’ performance and L’Oréal Luxe recorded double-digit gains. Vichy achieved a double-digit rise, driven by Minéral 89.

Eastern Europe posted a +6.7% like-for-like sales increase (-0.8% on reported figures). Turkey and Central European countries continue to drive growth; sales in Russia are temporarily down.

Africa and the Middle East sales are up +18.3% like-for-like and +5.4% based on reported figures. L’Oréal said the Gulf States are growing strongly and all divisions have returned to market share growth. Sales continue to rise in Egypt, and South Africa has made a ‘satisfactory’ start to the year, the company noted.