L’Oréal Q3: Better-than-Expected

Expect the worst, hope for the best. It's a maxim for many and a practice for a lot of FMCG companies and their suppliers during the COVID-19 pandemic. But L'Oréal didn't just hope, it delivered, as sales declined just 2% to $8.3 billion in the recently concluded third quarter. The company said active cosmetics sales paced the recovery as sales soared 29.9% during the period. Meanwhile, professional product sales jumped 11.0% and consumer product sales rose 0.8%, but L'Oréal Luxe sales declined 6.2%. For the nine months, total sales fell 7.4% to $23.7 billion.

The company noted that during the third quarter, North American sales rose 1.3%, while new market sales jumped 4.2%. In contrast, sales in Europe declined 2.5%.

CEO Jean-Paul Agon, noted that after a first half marked by a crisis of supply, linked to the closure of points of sale around the world, L’Oréal put everything in place, as early as June, to stimulate demand for its brands and products and to re-engage all its business drivers. All of the launches initially planned went ahead, business drivers and media investments were strengthened, and “Back to Beauty” plans were deployed with L'Oréal's distribution partners everywhere, in brick-and-mortar and e-commerce, to stimulate the return to consumption.

“This return to growth is evidence of consumers’ robust appetite for beauty products and our innovations. It is also the fruit of the remarkable commitment of all the teams, who were mobilized in all areas of the group and in all countries,” said Agon. “All these initiatives enabled us to significantly outperform a beauty market which is still on the road to recovery.”

According to Agon, the professional products division posted its best quarter in many years, thanks to the reopening of salons and the acceleration of e-commerce. Despite its extensive exposure to the makeup category, the consumer products division returned to growth thanks to a number of commercial operations. L’Oréal luxe significantly outperformed its market thanks to a very strong launch plan and its unique portfolio of complementary brands. Finally, the active cosmetics division achieved a record quarterly growth, driven by the remarkable success of all its brands.

“All Divisions were able to seize market opportunities, particularly in the skin care category, where our brands are on the offensive” he insisted.