- L’Oreal’s second-quarter like-for-like (LFL) sales grew by 2.4%, slightly below the estimate of 2.68%.
- Professional products exceeded expectations with 11.5% LFL sales growth, surpassing the 6.25% estimate.
- Consumer products also outperformed with 3.3% LFL sales growth, against a 2.31% estimate.
- L’Oreal Luxe faced a decline in sales by 1.9%, missing the positive estimate of 1.21% growth.
- Dermatological beauty sales rose by 3.5%, falling short of the 4.11% estimate.
- Geographically, North America saw a significant increase in comparable sales by 8.3%, compared to an expected 4.01%.
- In contrast, North Asia’s comparable sales decreased by 8.8%, underperforming against a -5.96% estimate.
- European comparable sales matched forecasts at 2.4%, below the estimate of 4.2%.
- Regions including South Asia Pacific, Middle East, North Africa, and Sub-Saharan Africa experienced robust growth with a 10.5% increase, surpassing the 9.34% expectation.
- Latin America saw the highest regional growth with a 12.4% increase, outperforming an estimate of 7.63%.
- Total sales for the quarter were EU10.74 billion, slightly missing the EU10.77 billion estimate and showing a year-over-year decline of 1.3%.
- Professional products and consumer products sales met or exceeded estimates, while L’Oreal Luxe and dermatological beauty fell short.
- Operating profit rose to EU4.74 billion, exceeding the estimated EU4.69 billion, with an operating margin of 21.1% versus a 20.8% estimate.
- Net income decreased by 7.9% year-over-year to EU3.37 billion, falling under the EU3.72 billion estimate.
- Adjusted earnings per share (EPS) were EU7.07, surpassing both the previous year’s EU6.98 and the EU7.01 estimate.
- Currency fluctuations negatively impacted results by 1.9%, more than the estimated 1.54% effect.
- The net impact from changes in the scope of consolidation was a positive 0.5%, against an estimate of 0.37%.
- CEO Nicolas Hieronimus noted an acceleration in LFL growth between the first and second quarters, driven by emerging markets, mainland China’s rebound, and North American recovery, despite a slowdown in Europe.
- The CEO expressed confidence in continuing to outperform the global beauty market, anticipating growth across sales and profitability despite economic and geopolitical tensions.
A look at L’Oreal SA Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, L’Oreal SA is positioned favorably for long-term growth. With high scores in Growth, Resilience, and Momentum, the company shows promising signs of expansion and stability. L’Oreal’s strong focus on developing new products and adapting to market trends has contributed to its positive outlook for the future. Additionally, its resilience in weathering economic downturns and maintaining steady growth rates highlight the company’s ability to withstand challenges.
L’Oreal SA‘s strategic position in the health and beauty industry is further strengthened by its moderate scores in Value and Dividend. Although not the highest, these scores indicate that L’Oreal is still regarded positively in terms of its attractiveness for investment and shareholder returns. Overall, with its diverse range of health and beauty products catering to both professionals and consumers, L’Oreal SA appears well-equipped to sustain its growth trajectory in the long run.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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