L’Oreal’s Fourth-Quarter Sales Fall Short of Estimates
Sales Overview
L’Oreal’s fourth-quarter sales fell short of analysts’ estimates as demand in the US failed to make up for a continued downturn in China. Sales overall rose 2.5% on a comparable basis in the period, lower than the 3.8% gain expected by analysts. Revenue in North America only grew 1.4%, while the region including China continued to experience a drop.
Regional Performance
The company’s American Depository Receipts slid as much as 2.4% in mid-day trading in New York. L’Oreal’s results were more resilient than those of Estee Lauder Cos, which earlier this week announced plans to cut up to 7,000 jobs after predicting that sales in the current quarter will slide by up to 12% due to continued underperformance in its duty-free business in Asia.
Industry Challenges
The industry is facing a number of challenges, including a steep slowdown in China, where consumer confidence has been hurt by a property crisis as well as youth unemployment. Additionally, the company and the wider beauty industry must contend with the threat of potential US tariffs under President Donald Trump.
Operational Performance
L’Oreal’s operating profit in 2024 rose to €8.69 billion (S$12.2 billion), slightly higher than analysts’ estimate of €8.65 billion.
Changes in Leadership
Separately, the company announced that Francoise Bettencourt Meyers, 71, whose family has a controlling stake in L’Oreal, has decided not to seek a renewal of her board seat when it expires in April. She will be replaced by Alexandre Benais, who heads her family’s investment vehicle Tethys Invest, after a vote at the company’s annual general meeting.
Conclusion
L’Oreal’s fourth-quarter sales have fallen short of estimates, driven by continued challenges in China and a slower-than-expected growth in the US. The company’s operating profit, however, has shown resilience, and the company is looking to the future with a new leadership team in place.
FAQs
Q: What was L’Oreal’s fourth-quarter sales growth rate?
A: L’Oreal’s fourth-quarter sales grew 2.5% on a comparable basis.
Q: What was L’Oreal’s operating profit in 2024?
A: L’Oreal’s operating profit in 2024 was €8.69 billion (S$12.2 billion).
Q: Who will replace Francoise Bettencourt Meyers on L’Oreal’s board?
A: Alexandre Benais, who heads her family’s investment vehicle Tethys Invest, will replace Francoise Bettencourt Meyers on L’Oreal’s board.
