L’Oreal posted 8.1% sales growth in the fourth quarter, a touch slower than in the previous three months, with firm demand in the United States and Europe helping to offset the dent from coronavirus disruptions in China.
The cosmetics company, which sells Maybelline mascara and CeraVe skincare, recorded sales for the last three month of 2022 of 10.3 billion euros ($11.1 billion), in line with analyst expectations, according to Refinitiv data.
The 8.1% growth rate for the three months to end-December compared with a 9.1% increase in sales in the third quarter.
Overall revenues were boosted by 9.4% like-for-like growth in the United States and 8.1% growth in Europe, although the company said it saw a “drastic slowdown” in China in the second half of the year.
L’Oreal grew faster than the market average across all its regions, Chief Executive Nicolas Hieronimus told CNBC’s Charlotte Reed in Paris, with Europe proving a “pleasant surprise.”
“What we see is that beauty is a very affordable indulgence. In times of crisis, as we’ve seen across history, we have this incredible resilience and this desire of consumers to indulge themselves with our products,” Hieronimus said.
L’Oreal share price.
Business in December in China — one of the fastest-growing markets for cosmetics — was “a bit difficult,” he told CNBC, but February showed promise for the rest of the year and he expects the company’s reopening to provide a tailwind.
Luxury and cosmetics companies including Richemont, LVMH and Burberry, have all seen business affected by disruptions in China, prompting Estee Lauder Cos Inc to forecast a bigger drop in full-year profit than it had initially estimated.
L’Oreal raised prices towards the end of the second half and focused on launching new, more expensive products, partly offsetting higher input costs.
Hieronimus said offsetting “most” input costs had led it to a higher operating profit for the year.
The fastest growth came from the division selling skincare labels CeraVe and La Roche-Posay, up 19.4% over the quarter while the luxury division posted 5.5% growth.
—CNBC’s Jenni Reid contributed to this article.