L’Oreal Luxury Makeup Demand Keeps Growing Despite Inflation
Investors have been watching to see whether consumers are starting to feel the pinch from higher inflation.
(Bloomberg) -- L’Oreal SA sales climbed as the cosmetics giant was helped by strong demand for its luxury products, offsetting the negative impact of Covid-19 restrictions in China.
Overall sales rose 13% on a comparable basis in the second quarter, the French company said late Thursday. Analysts expected a gain of 9.7%. The luxury arm grew 15%.
L’Oreal Luxe became the group’s biggest unit last year, surpassing its mass-market consumer products division, which sells Maybelline New York mascara as well as Garnier shampoo. Consumers have been spending more on premium beauty brands such as Helena Rubinstein creams and Saint Laurent fragrances.
Investors have been watching to see whether consumers are starting to feel the pinch from higher inflation and buying cheaper products. The company said it’s confident it will outperform this year.
Chief Executive Officer Nicolas Hieronimus is set to provide more details during a presentation Friday.
L’Oreal’s consumer division has suffered during the pandemic due to restrictions and mask-wearing rules that hurt demand for makeup. While most regions have lifted those restrictions, China’s zero-Covid policy and this week’s lockdown in Wuhan may continue to weigh on demand for such products.
L’Oreal said a lockdown in Shanghai curbed product deliveries early in the second quarter. But revenue in China grew by double-digits last month, once most restrictions lifted.
Operating profit jumped by a quarter in the first half and was above analyst expectations.
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