The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Maybelline owner L’Oréal 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’Oréal posted similar trends as vaccination campaigns progress and people begin to socialise more.
The French group, which also owns brands like Lancôme 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’Oréal 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.
ADVERTISEMENT
Some of the L’Oréal 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’Oréal 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 ($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.
By Sarah White
Learn more:
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
Request your invitation to attend our annual gathering for leaders shaping the global beauty and wellness industry.
Excitement for its IPO is building, but in order to realise its ambitions, more acquisitions and operational expenses might be required.
In an increasingly crowded space, makeup brands that prioritise natural ingredients are finding new ways to get their message across.
Shana Randhava, Priya Venkatesh, Heela Yang and Robin Tsai will join Imran Amed and Priya Rao to identify the entrepreneurs shaping the future of the beauty industry.