L'Oreal Shares Hit Two-Year High After Strong Third-Quarter Sales

what happened

Shares of the French cosmetics group L'Oreal rose about 4% on Friday, reaching their highest level since June 2024. According to Reuters, the company said late on Thursday that sales from July to September grew 7.7% on an adjusted like-for-like basis, to 11.56 billion euros ($12.95 billion). A consensus forecast compiled by Visible Alpha had pointed to growth of 5.9%.

Results beat expectations in every region except Latin America, with North Asia, which is mostly China, well ahead of estimates. All divisions except the mass market unit exceeded forecasts. Barclays analysts wrote that "L'Oreal, once again, beat a high bar," while Jefferies called the update "an impressively strong" one and pointed to a shift in momentum in China and Europe.

why it matters

Roughly a third of revenue comes from the luxury division, which accounts for about two thirds of the group's sales in China, so L'Oreal stands to benefit if demand in the country recovers. The company says it is growing three times faster than the Chinese market. The shares are up more than 17% so far this year.

market impact

Cosmetics and luxury: strong Chinese demand supports L'Oreal shares and the European consumer sector

tags

instruments