PARIS (Reuters) -L’Oreal reported a 3.5% rise in like-for-like first-quarter sales on Thursday, beating expectations for slower growth, as strong demand for its face creams and perfume in Europe helped counter challenging conditions in the United States.
The French cosmetics group, which owns Maybelline makeup and Kiehl’s skincare, reported sales of 11.7 billion euros ($13.30 billion) for the three months to the end of March.
Growth exceeded a Visible Alpha consensus of 1.3% cited by analysts at Jefferies, though also included a 100 million euro benefit from phasing of an IT overhaul, the company said.
L’Oreal has outperformed the global cosmetics market in recent years with products that span its mass-market shampoos to high-end Valentino perfume and doctor-recommended CeraVe lotions.
But growth had slowed over the last year as inflation-led price rises eased and competition heated up in China and the medical skincare category.
The U.S. market was “more challenging than anticipated” in the first quarter, said CEO Nicolas Hieronimus in a statement, adding, however, that China was slightly better than expected.
Luxury group LVMH said on Monday its beauty retailer Sephora had seen slower growth in the quarter in the U.S., hurt by cheaper offers on Amazon.
L’Oreal is also exposed to a pullback in discretionary spending in economies hit by President Donald Trump’s tariffs.
Hieronimus said L’Oreal planned to “drive growth and manage our P&L to offset the impact of tariff hikes – with the benefit of an already very healthy gross margin”.
He added that L’Oreal would continue to outperform the global beauty market, which is still expected to grow despite the current economic and geopolitical tensions.
($1 = 0.8795 euros)
(Reporting by Dominique Patton; Editing by Kirsten Donovan)
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