L’Oréal CEO says Q3 slowdown in Asia is ‘temporary’
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The L’Oréal chairman has stated that despite a market that slowed in the third quarter in Asia and in Travel Retail, L’Oréal Luxe has “strengthened its worldwide position with significant gains in Western Europe, in Asia, Pacific, in the Middle East and in Latin America.”
His statement accompanies the release of the firm’s nine-months sales results which reveal a temporary third quarter slowdown for L’Oréal Luxe in Asia; strong e-commerce sales (projected at +€1bn in 2015); a slowdown in travel retail; and ‘significant’ sales and profit growth.
According to Agon, despite these results, the ‘Consumer Products Division’ is performing well in India, Australia and Thailand. In China, growth at L’Oréal Paris is reportedly accelerating, while Magic is undergoing a transitional period.
Market ‘turbulence’ in Asia
The active cosmetics division is also said to be ‘growing strongly’, thanks to the success of La Roche-Posay.
Kiehl’s, Yves Saint Laurent and Giorgio Armani are contributing to the dynamism of L’Oréal Luxe, in a context of slower third-quarter growth in Hong Kong and Travel Retail Asia.
Roche-Posay is renewing its expert franchise for oily skin with the launch of Effaclar K(+). The company adds that the brand is continuing to post double-digit growth in all geographic Zones, with ‘outstanding performances’ in France, Brazil and China. The successful international roll-out of SkinCeuticals is continuing.
“L’Oréal Luxe experienced a temporary slowdown as a result of market turbulence over the summer in Asia, in Hong Kong and in Travel Retail. By geographic zone, North America’s growth is gradually increasing and Western Europe confirms its positive trend. In the third quarter, the New Markets have been hampered by the difficult Brazilian market, market turbulence in Asia and the taking over of agents’ contracts in the Middle East. In China, sales growth is in line with earlier quarters,” says Agon.
Finally, the chairman said that currency fluctuations actually had a positive impact of +8.3% and if September-end exchange rates (€1 at $1.12) are extrapolated up to December 31, then the impact of currency fluctuations would be +6.7% for the whole of 2015.
Questions & Answers
Q.Which specific regions did L’Oréal Luxe see strong performance in, despite the general market slowdown?
Which specific regions did L’Oréal Luxe see strong performance in, despite the general market slowdown?
L’Oréal Luxe strengthened its worldwide position with significant gains in Western Europe, Asia Pacific, the Middle East, and Latin America. This helped offset the overall slowdown in some market areas.
Q.What caused the temporary slowdown for L’Oréal Luxe in the third quarter?
What caused the temporary slowdown for L’Oréal Luxe in the third quarter?
The temporary slowdown for L’Oréal Luxe was attributed to market turbulence over the summer in Asia, specifically in Hong Kong, and a general slowdown observed within Travel Retail.
Q.Which L’Oréal division and brands are showing strong growth currently?
Which L’Oréal division and brands are showing strong growth currently?
The active cosmetics division is growing strongly, primarily driven by the success of La Roche-Posay. Kiehl’s, Yves Saint Laurent, and Giorgio Armani are also contributing to the dynamism of L’Oréal Luxe.
Q.How did currency fluctuations impact L’Oréal's financial results?
How did currency fluctuations impact L’Oréal's financial results?
Currency fluctuations had a positive impact on the company's financial results. They contributed an additional +8.3% to the nine-month sales and are projected to add +6.7% for the entire year 2015.
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