L’Oreal, the renowned cosmetics group, has defied the odds in the luxury and fashion industry in China by experiencing growth in sales during the second quarter, despite the challenging circumstances caused by COVID-19 lockdowns. The company reported total sales of 9.31 billion euros ($9.46 billion) for the three-month period ending in June, marking a significant 13.4% increase on a like-for-like basis. This figure surpassed the expectations of analysts, who predicted an 8.9% rise in revenues. L’Oreal’s exceptional performance can be attributed to the resurgence of the makeup market as people gradually return to socializing and attending events following the pandemic.

Nicolas Hieronimus, the CEO of L’Oreal, emphasized the high demand for lip glosses and vibrant colors, which he considered a clear indication of people’s emergence from the challenges of the past two years. Sales in North America witnessed a 10.7% increase on a like-for-like basis, as customers flocked to stores to stock up on lipsticks and premium fragrances. In contrast to many Western brands that experienced a decline in sales due to store closures and movement restrictions, L’Oreal achieved a remarkable 13% revenue growth in China for the quarter, surpassing the overall market decline of approximately 6%. This success can be largely attributed to an increase in e-commerce sales.

L’Oreal’s consumer products division, which includes popular brands such as Maybelline and L’Oreal Paris, achieved a growth rate of 9.1%, showing accelerated growth compared to the previous quarter’s rate of 6.9%. Despite rising costs, consumers continued to invest in beauty products, indicating a trend of upgrading across all categories. L’Oreal Luxe, the division responsible for brands like Yves Saint Laurent and Helena Rubinstein, experienced a remarkable sales growth of 15.3%. This outperformed the perfumes and cosmetics division of its competitor, LVMH, which reported an 8% growth in the same period, representing a slowdown from the previous quarter.

While the outlook for the second half of the year remains uncertain, L’Oreal maintains an overall sense of confidence and optimism about its business prospects. Hieronimus expressed that the company is “overall pretty confident, even bullish” about the future. L’Oreal’s ability to thrive in the Chinese market and exceed expectations during a challenging period showcases its resilience and adaptability in overcoming obstacles. As the world gradually recovers from the pandemic’s impact, L’Oreal’s success serves as a positive sign of recovery for the luxury and fashion industry.

Useful links:
1. L’Oreal Official Website
2. Article: Is L’Oreal Taking an Omnichannel Approach to China?