L’Oréal’s luxury division weighed down by COVID-hit Chinese skincare market

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Despite this, and although the French beauty giant didn’t share a breakdown of its skincare sales, CEO Nicolas Hieronimus revealed that all of its brands are seeing double-digit growth.

Speaking at the company’s latest trade conference in the third quarter (Q3), he highlighted the strength of its luxury division, which posted like-for-like growth of 4.6%.

On the other hand, the group’s consumer products and active cosmetics divisions grew by 10% and 26% respectively.

L’Oréal Luxe was penalized in Q3 mainly due to repeated lockdowns in China, which is incidentally one of L’Oréal’s biggest skincare markets.

“Obviously our luxury division is outperforming the market, but the third quarter was impacted by China because China is the part of the world… where we have our biggest share in skincare. But brands like Lancôme Abosolue, Helena Rubinstein are doing really well, and Kiehl’s has good momentum. said Hieronimus.

Hieronimus clarified that this does not mean that the Chinese skincare market is softening. “Skin care is not weak in China,”he pointed out.

“The number one category in China by far is skincare… Looking between makeup and skincare today in China, skincare remains the top performing category. “

Hieronimus explained that given the importance of the Chinese skincare market to its luxury division, the two were intrinsic, making a two-way impact inevitable.

“It’s just that because L’Oréal Luxe is strong in China and China is a big skincare market, the slowdown in China has impacted our overall skincare performance. in the third quarter.”

In North Asia, which includes markets such as China, Japan and South Korea, L’Oréal posted like-for-like growth of just 0.3% due to the difficulties in China.

Despite the slowdown in the quarter, Hieronimus described skincare performance in China as “very positive”. He highlighted the performances of Lancôme Abosolue and Helena Rubinstein, which he was convinced were on their way to becoming a billion-euro brand.

In addition, L’Oréal Luxe also managed to increase its market share in Q3 in China.

“When we discussed our second quarter and first half results, we said that we achieved a record 30% market share for L’Oreal Luxe in China in the second quarter. Well, we achieved more than 31% market share in the third quarter thanks to the solid performances of Lancôme and Helena Rubinstein.” said Hieronimus.

Moving forward, Hieronimus reiterated L’Oreal’s confidence in China as a source of growth.

“I must say that we remain very optimistic in the long and medium term on China…we believe in China and we want to invest in China and we are launching new brands in China.”

In total, for the third quarter, L’Oréal achieved sales of 9.58 billion euros (USD), up 9.1% on a like-for-like basis. Double-digit growth in Europe (10.5%), SAPMENA (30%) and Latin America (16.2%), as well as 9.3% growth in North America helped offset disruptions in China.

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