L’Oréal: Sales Top $44 Billion in 2023

L'Oréal's sales rose 7.6% last year to 41.18 billion euros ($44.4 billion at current exchange rates). Like-for-like gains were 11% on the year.

However, L’Oréal posted worse-than-expected Q4 organic sales results. The company said its sales for the three months ended Dec. 31 grew 2.8% at reported exchange rates to 10.61 billion euros. That represented a 6.9% organic rise. Analysts had expected the group’s like-for-like growth to be 9.5%.

“The miss comes almost entirely from China,” wrote Bruno Monteyne, a Bernstein analyst in a note entitled “Disappointing end to the year.”

By region, Q4 sales in North Asia fell 6.2% organically, versus a consensus of +0.4%. Europe, too, fell below organic growth consensus. Only North America beat consensus, with a 9.4% gain.

Despite a tough Q4, CEO Nicolas Hieronimus remained upbeat.

“In a challenging environment of geopolitical tensions, inflationary pressures and a stagnating beauty market in China, we delivered our best like-for-like growth in more than 20 years (excluding in 2021), he said, adding he is especially pleased with L’Oréal’s strong acceleration in emerging markets.

“As we head into 2024, we remain optimistic about the outlook for the beauty market and confident in our ability to keep outperforming it and to achieve another year of growth in sales and profits,” Hieronimus concluded.

Here's a look at 2023 results by division and region.

Kérastase gains were due to the success of Genesis and Chronologiste, as consumers continued to premiumize their haircare routines. Growth was underpinned by L’Oréal Professionnel’s innovations, including Metal Detox and Absolut Repair Molecular. In hair color, it was driven by Shades EQ by Redken and the new Inoa by L’Oréal Professionnel. Momentum was positive across all regions, led by China, the division’s second largest market, as well as emerging markets, notably India, now the fifth largest market. In the professional beauty industry, the division strengthened its leadership position, supported by its Beauty Tech business, which drove strong growth in e-commerce both in B2B and B2C.

The consumer products division had its best growth in more than 30 years at +12.6% LfL and +8.2% reported. The division outperformed a dynamic mass market and delivered strong growth surpassing 15 billion euros. Throughout the year, growth was driven by volume and value as the division continued to pursue its strategy of simultaneously democratizing and premiumizing. All four key brands grew in double digits, with L’Oréal Paris crossing the 7-billion-euro mark. All major categories grew. Makeup was the leading contributor to the division’s growth, propelled by the launches of Surreal Mascara by Maybelline New York, Infallible Matte Resistance lipstick by L’Oréal Paris and Fat Oil gloss by NYX Professional Makeup. Hair was also very dynamic, with premium launches like Elvive Bond Repair by L’Oréal Paris and Garnier Good haircolor. Skincare grew significantly, with the very successful global rollout of Garnier Fast Bright with Vitamin C as well the launches of Revitalift Clinical and Glycolic Bright by L’Oréal Paris. By region, the most noteworthy performances were in Europe, and in emerging markets, particularly Mexico, Brazil and India. North America delivered robust growth.

L'Oréal luxe grew 4.5% LfL, 2.0% reported and is No. 1 in the global luxury beauty segment, according to the company. Excluding North Asia, which was impacted by the reset of travel retail and the market softness in mainland China, L’Oréal Luxe sales grew double digits. This was driven by continued investment in its portfolio of complementary brands, as well as its ambitious omni-channel strategy, now including Amazon in the US. The division has become the global market leader in luxury beauty thanks to its strong momentum in developed and emerging markets and its remarkable outperformance in China. There, the early adoption of Douyin and the ongoing investment in point-of-sale quality paid off. Fragrances remained the star performer, driven by Yves Saint Laurent with the worldwide blockbuster Libre and the successful launch of MYSLF, as well as Born in Roma by Valentino, Paradoxe by Prada, Wanted by Azzaro and Angel by Mugler. In skincare, ultra-luxury brand Helena Rubinstein passed the one-billion-euro mark, and Takami advanced strongly in the medical luxury segment. Makeup momentum accelerated in the second half of the year, driven by the Couture brands. More recently added brands like Prada, Takami and Valentino made strong growth contributions. Aēsop, integrated since August 30, is off to a promising start, according to L'Oréal.

The dermatological beauty division had spectacular growth of 28.4% LfL and 25.5% reported. Dermatological beauty maintained its momentum, growing twice as fast as the highly dynamic dermocosmetics market, and delivering its sixth consecutive year of double-digit growth. As a result, sales have more than doubled in just three years.

Momentum was strong across all regions and well-balanced between developed and emerging markets, according to L'Oréal. In mainland China, the division significantly outperformed a market that proved resilient. La Roche-Posay was the primary growth driver. The brand's successful launches included UVmune400 sun care, as well as the successful Cicaplast microbiome renovation. CeraVe continued to advance strongly both in the US, where it is now the No. 1 skincare brand, and in the rest of the world. Vichy reported its best growth in 18 years, while the portfolio of aesthetics-related brands grew in double digits. L’Oréal Dermatological Beauty places three of its key brands in the top-four most prescribed brands by dermatologists in the world.

By region, sales in Europe rose 16.0% LfL and 13.7% reported. L'Oréal outperformed across all of its core Western and Central European countries. In fact, the region was the single-largest growth driver at group level for the second year in a row. Volume and value both contributed strongly, the latter fueled by mix and price. All categories advanced by double-digits, led by skincare and makeup. Professional products continued to recruit new consumers and develop its position in premium haircare thanks to Kérastase and the strong momentum of Série Expert by L'Oréal Professionnel. In consumer products, each of the four key brands recorded exceptional growth. L'Oréal Luxe further strengthened its leadership in fragrances, driven by Libre by Yves Saint Laurent—now the second largest female women's fragrance in Europe after Lancôme’s La Vie Est Belle – and by Paradoxe by Prada. Dermatological beauty outperformed its market significantly; thanks to the continued strong growth of CeraVe, the division now has three of the top-four dermo-cosmetics brands in Europe. L'Oréal continued to strengthen its position in the most dynamic channels: drugstores, e-commerce and pharmacies.

Sales in North America advanced 11.8% LfL and 9.7% reported. L’Oréal outperformed a dynamic market, driven by innovations and channel optimization. Each of the divisions grew, led by dermatological beauty and L’Oréal Luxe. Professional products outperformed the market thanks to its well-rounded brand portfolio with Kérastase particularly dynamic. This was backed by its strong innovation pipeline, and its omni-channel focus, where selective channels and e-commerce outperformed. Consumer products grew strongly in haircare, boosted by the continued success of the core Elvive and Ever haircare franchises. In a vibrant makeup market, momentum remained strong, supported by a well-filled innovation pipeline across all brands. L’Oréal Luxe outperformed the market in fragrances, led by Born in Roma by Valentino and MYSLF by Yves Saint Laurent. In makeup, Couture brands Yves Saint Laurent and Armani were bolstered by new launches. E-commerce remained dynamic, particularly during the holiday season. Dermatological beauty continued its exceptional performance, outperforming the market thanks to the uninterrupted success of CeraVe, now the No. 1 skin care brand in the US, and La Roche Posay. Skinbetter Science maintained strong momentum.

Sales in North Asia fell 0.9% LfL and 5.8% reported. North Asia continued to be impacted by the reset in travel retail following the change in policy regarding daigous. In mainland China, where the beauty market remained flat, L’Oréal grew 5.4%, significantly strengthening its leadership – boosted by the group’s continued investment in the quality of its offline distribution in a truly O+O (offline plus online) market. In Hong Kong, momentum was buoyant, as tourist activity resumed. In Japan, L’Oréal significantly outperformed a dynamic market, driven by consumer products and L’Oréal Luxe. In North Asia, growth was fuelled by L’Oréal dermatological beauty, where all three core brands grew in double-digits led by CeraVe, and Professional Products, where Kérastase continued to advance strongly. Both divisions outperformed their respective markets. L’Oréal Luxe continued to outperform its market, with particularly strong momentum in premium skincare thanks to the remarkable success of Helena Rubinstein and Takami; Couture brands like Yves Saint Laurent and the recently launched Prada Beauty also contributed. The consumer products division was supported by the rebound of its makeup brands, Maybelline New York and 3CE Stylenanda. Offline and online channels both contributed to growth in the region.

Sales in SAPMENA-SSA had growth of 23.2% LfL and 16.4% reported. In SAPMENA, growth was broad-based as each category, division and country advanced in double-digits. Mix-driven value and volume both contributed strongly. Fragrances was the most dynamic category, followed by skincare and makeup; haircare was boosted by continued premiumization. The stand-out performers by division were dermatological beauty, where CeraVe continued its successful expansion, and consumer products, where all brands grew in double-digits. By country, the Australia-New Zealand and GCC6 clusters, as well as India, were the top-three growth contributors, all advancing in excess of 20%.

Sales progressed faster online than offline, driven by India and Vietnam. SSA saw record growth with all countries advancing in double digits. Skincare and makeup led category growth; consumer products and dermatological beauty were the top performers by division.

Sales in Latin America achieved growth of 24.4% LfL and 22.8% reported. L’Oréal maintained exceptional momentum with strong contributions from both value and volume. The group outperformed a dynamic beauty market. All categories reported double-digit growth. Skincare, makeup and haircare were particularly dynamic. By division, the stand-out performers were consumer products, where all key brands and categories performed strongly, and dermatological beauty, where La Roche-Posay and CeraVe continued their outstanding growth.Growth was broad-based across all countries. The top-two contributors were Brazil and Mexico; the latter reported spectacular growth in excess of 30%.

The successfully implemented omnichannel strategy resulted in well-balanced online and offline growth.

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