L'Oreal Sales Rise on Haircare Boom and ‘Lipstick Effect'

L'Oreal, the world's largest cosmetics company, announced stronger-than-anticipated quarterly sales, fueled by robust demand for its hair care range and mascaras. The Paris-based firm, known for brands like CeraVe, Maybelline, and Valentino, reported sales of €11.6 billion ($13.21 billion) for the three months ending in June. This figure represents a 6.3% increase on a like-for-like basis, slightly surpassing analyst expectations of 5.7% growth. The company's performance was bolstered by its mass-market products division, which saw significant growth, particularly in Europe. This region, experiencing a cost-of-living crisis, saw sales rise by 6.7%. The "lipstick effect," where consumers purchase cosmetics to boost their mood during stressful times, appears to be contributing to this trend. Online sales also showed remarkable outperformance. While overall growth slowed from the first quarter due to tougher comparisons, L'Oreal's largest business unit exceeded expectations. The company's Luxe division, however, lagged forecasts with 4.7% growth, despite double-digit growth in China, as challenges in China's travel retail sector continue to impact performance. L'Oreal shares have seen a 4% increase year to date.

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a remarkable outperformance online