Maybelline owner L’Oreal on Thursday said sales growth had accelerated in the second quarter partly due to resurging makeup sales in the United States as COVID-19 lockdowns ease, and salons used more professional products.
High-end fashion labels have benefited from booming Chinese and U.S. demand in recent quarters, helping revenues at luxury goods groups like LVMH bounce back, and L’Oreal posted similar trends as vaccination campaigns progress and people begin to socialize more.
The French group, which also owns brands like Lancome and makes Armani cosmetics, said sales of high-end perfumes were on the rise, while makeup revenues, which have been struggling for several years, were recovering.
New Chief Executive Nicolas Hieronimus, a L’Oreal veteran who took the helm in May, told Le Figaro newspaper that cosmetics and fragrances sales had yet to recover to pre-2020 levels, although the group’s overall revenues are now growing versus 2019.
Some of the L’Oreal divisions which have faltered compared to others, such as the consumer goods unit that houses products sold in supermarkets, benefited from the makeup uptick. The professional products division that sells to hair salons also posted a big revenue jump.
L’Oreal had relied on its e-commerce business during lockdowns last year to reach consumers, who lapped up hair care treatments and skin creams, but store closures hurt sales.
Overall group sales reached 7.6 billion euros ($9.03 billion) in the second quarter, growing by 33.5 percent when stripping out currency swings and acquisitions. That was up from 10.2 percent like-for-like sales growth in the previous three months, and beat a consensus for 27.5 percent growth cited by Credit Suisse.
Hieronimus said in a statement there would be more product launches in the second half of 2021.
Operating margins rose to 19.7 percent of sales by the end of the first half, with operating profit up 26.8 percent to 3 billion euros. ($1 = 0.8418 euros)
By Sarah White
L’Oréal Turns to Google as Coronavirus Spurs Virtual Makeup Shift
The partnership relies on technology designed by ModiFace, a Canadian augmented reality specialist acquired by L’Oréal in 2018, and will also extend to the US group’s YouTube video sharing platform