L’Oreal, the Paris-based beauty conglomerate, has reported an 11.1% increase in sales for the third quarter, driven by strong growth in Europe and the United States. However, the company fell short of expectations for a rebound in China. Sales for the three-month period from July to September reached 10 billion euros, slightly below the anticipated 11.5% increase. The consensus estimates from Barclays projected a stronger performance in China.

A significant factor behind L’Oreal’s subdued performance in China was its North Asia region, which primarily includes sales from mainland China. Sales in North Asia saw a decline of 4.8%, well below the projected 14.4% rise. L’Oreal attributed this decline to changes in China’s policy regarding the sales channel through personal shoppers, known as daigou, which affected its travel retail business. Despite these challenges, the company still managed to achieve 7.7% sales growth in mainland China, where the beauty market remains relatively stable despite a slow recovery from the pandemic. Furthermore, L’Oreal continued to gain market share in the country.

China has been a key target for L’Oreal and investors due to factors such as high youth unemployment and a property crisis, which have complicated the country’s post-pandemic rebound. L’Oreal dominated China’s beauty and personal care market last year, accounting for the largest share of the $78.9 billion industry. The company has successfully increased its market share in China in recent months, particularly through its luxury division, which leads in high-end cosmetics. L’Oreal offers a wide range of products, including skincare, makeup, and fragrance, under various brands such as Maybelline, Yuesai, Lancome, Yves Saint Laurent, Valentino, and Prada.

Despite the challenges faced in China, L’Oreal’s overall sales performance remains strong, driven by growth in other regions. The company’s success in Europe and the United States signifies its ability to navigate the changing beauty landscape and meet the evolving needs of consumers. With its diverse portfolio of brands and continued focus on innovation and market expansion, L’Oreal is well-positioned to maintain its leading position in the global beauty industry.

Useful Links:
1. L’Oreal Official Website
2. Statista: Global Beauty Market Size