Business
L'Oreal's Revenue and Profit Miss Expectations: Stagnating Chinese Beauty Market Slows Down
French cosmetics giant records revenues of 41.18 billion euros – a brilliant result.
L'Oréal Misses Its Sales Expectations for 2023, Marked by Geopolitical Tensions, Inflation, and a Stagnant Beauty Market in China.
Nonetheless, the company remains confident for the current year in outperforming the market. The French cosmetics group reported on Thursday revenue of 41.18 billion euros ($44.37 billion) for the year, representing an increase of 7.6% in reported currency and 11% at constant currency.
Particularly in Europe, Revenues Increased by 13.7% to 13.01 Billion Euros, Thanks to the "Very Dynamic" Beauty Market According to L'Oréal. Consequently, the Region Becomes the Largest Growth Driver for the Second Consecutive Year. In North America, Where All Business Sectors Grew, Led by Dermatological Beauty and L'Oréal Luxe, Revenues Rose by 9.7% to 11.15 Billion Euros.
The corporation announced that the skincare brands CeraVe and La Roche Posay have driven revenue growth in the dermatological division, while L'Oréal Luxe has outperformed the market in the perfume sector with the fragrances Born in Roma by Valentino and MYSLF by Yves Saint Laurent. An increase of 22.8% to 2.92 billion euros was also recorded in Latin America.
However, revenue in North Asia fell by 5.8% to 10.66 billion euros due to the market slump in China. In the fourth quarter, global sales rose by 2.8% in reporting currency and by 6.9% in constant currency to 10.61 billion euros.
L'Oréal's net profit amounted to 8.4% at 6.18 billion euros for the year, while operating profit - a key indicator for analysts and investors - rose by 9.2% to 8.14 billion euros. The group will propose a dividend of 6.60 euros per share at its annual general meeting on April 23, representing an increase from the 6.00 euros last year.
According to Visible Alpha estimates, analysts had forecasted revenue of 41.49 billion euros, net income of 6.25 billion euros, and operating profit of 8.21 billion euros for the fiscal year. "As we move towards the year 2024, we remain optimistic for the prospects of the beauty market and confident that we will continue to outperform and achieve another year of sales and profit growth," said CEO Nicolas Hieronimus.
