French company L’Oreal, known for its popular brands such as Maybelline and Garnier, has experienced a resurgence in sales during the third quarter as COVID-19 lockdown measures eased. The company reported a 1.6% increase in overall sales, reaching 7 billion euros ($8.27 billion) from July to September compared to the same period last year. This positive performance can be attributed to L’Oreal’s success in the Chinese market and its continuous launch of new products.

Similar to other luxury goods companies, L’Oreal faced significant challenges earlier this year due to the pandemic. Store and airport closures impacted sales, along with the temporary closure of hair salons where L’Oreal sells its professional products. However, the company has since made a recovery in most divisions, including its mass market segment supplying products to supermarkets like Garnier.

These third-quarter results mark a significant improvement from the previous quarter, which saw a 19% decline in sales compared to the previous year. Analysts had predicted continued negative growth for L’Oreal, making this rebound even more noteworthy. Interestingly, the strongest growth did not come from L’Oreal’s well-known makeup brands like Maybelline, but rather from its active cosmetics division, which focuses on dermatological conditions and includes brands like Vichy, La Roche Posay, and CeraVe.

During an analyst conference call, Jean-Paul Agon, L’Oreal’s Chairman and Chief Executive, shared that the company had gained market share in the active cosmetics segment. He clarified that the speculated “wellness” trend during lockdowns did not significantly impact the division’s growth. However, he did highlight L’Oreal’s outperformance of its competitors in the Chinese market, where the company has a strong presence. This aligns with the increasing demand for luxury goods observed in Asia by other brands such as Hermes and Louis Vuitton.

Despite the challenges posed by the pandemic, L’Oreal has continued to invest in marketing and has seen a boost in online sales. However, the luxury products unit, which includes Lancome and cosmetics for Armani, has not performed as well and remains in negative territory. The restriction in travel has impacted luxury sales.

Contrary to concerns that makeup usage would decline during lockdowns, L’Oreal remains confident about the beauty product market’s outlook throughout the crisis. Agon cautiously addressed the recent rise in COVID-19 cases and subsequent restrictions but still expects growth in fourth-quarter sales. The company reconfirmed its expectations for like-for-like sales to expand in the second half of 2020.

Overall, L’Oreal’s ability to rebound after the initial impact of the pandemic highlights its resilience and strong market presence. With a focus on continuous product launches, success in the Chinese market, and navigating ongoing challenges, the company is well-positioned to emerge even stronger in the beauty industry.

[Here are two useful links related to the article:
BBC: L’Oreal sales rebound as lockdowns ease
Reuters: L’Oreal Q3 results exceed expectations after China lockdowns ease]