L'Oreal posts 2.4% rise in second-quarter sales
The French cosmetics group, whose brands include Maybelline makeup and CeraVe skincare, said sales in April-June totalled 10.74 billion euros ($12.38 billion), up 2.4% on a like-for-like basis from a year earlier, but undershooting the 2.9% growth seen in a Visible Alpha consensus estimate cited by Jefferies.
Underlying growth, after stripping out the impact of phasing in a new IT system, was 3.7%, the company said.
Growth in the global cosmetics market has slowed sharply in recent quarters from the highs of a post-pandemic surge, when inflation contributed to rising sales values.
The sector, and in particular perfume that is predominantly produced in Europe, is also facing higher costs from U.S. President Donald Trump's tariffs.
L'Oreal CEO Nicolas Hieronimus said he planned to continue to lobby for an exemption to U.S. tariffs on European cosmetics, even after Brussels agreed to a deal on Sunday that imposes a 15% tariff on U.S. imports of EU cosmetics.
"I don't think it's a good deal," he told Reuters in an interview.
"We're going to be writing to all the European leaders and negotiators to see whether there's a loophole we could benefit from, because in the end it's going to be costly," he said.
L'Oreal, which imports around 30% of its U.S. sales, could raise prices and move more production to the country where it has four factories, but is waiting for further negotiations between Trump and other nations to be finalised before making decisions, he added.
Analysts at Jefferies expect perfume sales in the U.S. to slow in the second half after companies hike prices, though Hieronimus said L'Oreal's fragrance sales were currently growing by double-digit figures, compared to 7% for the broader market.
There is "some pricing power on fragrances, but we have to also consider the elasticity of the demand," he added.
($1 = 0.8674 euros)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
a minute ago
- Reuters
As Evergrande faces delisting, China property debt revamp drags on
HONG KONG, July 30 (Reuters) - China Evergrande Group looks set to be kicked off the Hong Kong exchange next month after failing to revamp its debt and being pushed into liquidation, with the stubbornly weak Chinese property sector clouding the outlook for debt restructuring by its peers. China's property market, once a key growth driver for the world's second-largest economy, has been in a multi-year tailspin despite repeated government attempts to revive weak consumer demand. Developers face deteriorating cash flow but their bondholders are resisting taking heftier losses on their investments, delaying negotiations between companies and creditors, said restructuring advisers. Shares of Evergrande ( opens new tab, once China's top developer which was listed in Hong Kong in 2009, have been suspended from trading since Jan. 29, 2024, the day it received a liquidation order from the Hong Kong High Court. The liquidation order came after it failed to provide a viable restructuring plan for its $23 billion offshore debt. The company appears set to be delisted from the Hong Kong bourse as a result of its failure to meet the exchange's rules on resumption of trading within 18 months of the commencement of trading suspension. Its capitalisation, which once topped HK$400 billion ($51 billion), had shrunk to HK$2.2 billion when share trading was halted. The delisting of what had been one of China's prestige companies would add to gloom hanging over other developers which are scrambling to stay afloat and avoid getting into liquidation litigation by securing creditors' support to revamp debt. Evergrande is not listed on mainland Chinese stock markets. With Chinese new home prices falling at the fastest pace in 8 months in June, even developers who have completed first round debt revamps are weighing fresh negotiations and those that have not defaulted are also contemplating such a move to slash debt, financial advisers said. "There's no light at the end of the tunnel," said Glen Ho, national turnaround & restructuring leader at Deloitte, referring to the property market. "Companies want to delay their restructuring effective date and use time to exchange for more breathing room, but they cannot create new funds out of nothing." More than $140 billion, or more than 70%, of China property dollar bonds have defaulted since 2021, according to investment platform FSMOne Hong Kong, and the majority of them are still in various stages of being restructured. Property construction in China is expected to decline another 30% by 2035 due to structural changes in demand, ANZ analysts said in a June report, which could cast a long shadow over debt restructuring efforts in the near to medium term. Private developer Country Garden ( opens new tab, which defaulted on $14 billion offshore debt in 2023, is still trying to get its lenders' approval on its debt restructuring proposal before the next liquidation hearing on August 11. Other developers including KWG ( opens new tab and Agile ( opens new tab have yet to announce detailed restructuring proposals after having started the process in 2023 and 2024, respectively, soon after defaulting on their repayment obligations. Logan ( opens new tab and Powerlong ( opens new tab, on the other hand, have cut their offers to bondholders more than once, but have yet to secure approval from their creditors, said two people with knowledge of the matter said. The people declined to be identified as they were not authorised to speak to the media. Evergrande's liquidators, Country Garden and HKEX declined to comment. KWG, Agile, Logan and Powerlong did not respond to requests for comment. Advisers expect some developers, especially privately-owned ones, to go through more than one or even two rounds of debt revamp in the absence of an improvement in home sales outside China's top cities and the availability of funding channels. China's property sector accounted for about a quarter of the country's economic activity before it collapsed. But despite repeated attempts by authorities to stabilise the market, property investment in China declined 11.2% in the first half of this year from a year earlier, while property sales by floor area fell 3.5% and new construction starts dropped 20%. This year, Shimao ( opens new tab and state-backed Sino-Ocean ( opens new tab were among the latest to set a date for implementing restructurings after years of wrangling with creditors, according to their regulatory filings. Sunac ( opens new tab became the first developer earlier this year to propose a second restructuring to swap all its restructured notes into mandatory convertible bonds and has gained sufficient creditors approval. Zhongliang ( opens new tab also successfully extended the maturity of all its restructured bonds by two years. Kaisa's ( opens new tab restructuring plan, already approved by creditors and courts, however, has not yet gained the greenlight from China's top economic planner, as the plan involves new debt, two other people said. Kaisa and NDRC did not respond to request for comment. "There's no one single playbook; each restructuring plan must be tailored to a company's unique capital and creditor structure," said Una Ge, a Hong Kong-based partner at consultancy firm AlixPartners. "For privately-owned developers, however, the clear trend is a need for continuous deleveraging, as a single round of restructuring is often insufficient to keep them afloat." ($1 = 7.8499 Hong Kong dollars) ($1 = 7.1793 Chinese yuan renminbi)
Reuters
a minute ago
- Reuters
India's L&T jumps after first-quarter profit beat
July 30 (Reuters) - Shares of Larsen and Toubro (L&T) ( opens new tab jumped nearly 4% on Wednesday, a day after the Indian infrastructure giant topped first-quarter profit expectations. In early trade, the stock was the top percentage gainer on the benchmark Nifty 50 index (.NSEI), opens new tab, which is trading flat, and on the infrastructure sub-index (.NIFTYINFR), opens new tab, which is up 0.6%
Reuters
a minute ago
- Reuters
Indian central bank likely selling dollars to cap rupee's losses, traders say
MUMBAI, July 30 (Reuters) - The Indian central bank likely stepped in to support the rupee on Wednesday, five traders told Reuters, as worries over higher U.S. tariff rates on Indian exports pushed the currency to an over four-month low. The rupee was last quoted at 87.11 per U.S. dollar, down 0.3% on the day. The currency was a tad above the day's low of 87.13 hit in early trading. Traders pointed to dollar sales from Indian banks, most likely on behalf of the Reserve Bank of India, which helped limit the rupee's losses. The dollar offers were "not unusually large and intermittent," a trader at a private sector lender said. The dollar index was down 0.1% while Asian currencies were mostly rangebound. (This story has been refiled to say dollars, not dollar, in the headline)
