L'Oreal slumps as Q4 sales miss expectations

L’Oreal shares slumped on Friday after the cosmetics group posted lower-than-expected fourth-quarter sales.

In results released on Thursday, the company said fourth-quarter sales rose 6.9% on a like-for-like basis to €10.61bn, missing expectations of €10.9bn. On a reported basis, sales were up 2.8%.

On a LFL basis, sales were up 11.6% in Europe and 9.4% in North America, but down 6.2% in North Asia, which continued to be dented by market softness in mainland China and "the reset in travel retail" following the change in policy regarding 'daigous'.

Daigous refers to the process by which agents buy luxury goods abroad to avoid taxes and resell them in China.

For the full year 2023, sales grew 7.6% on a reported basis and 11% on a LFL basis to €41.18bn.

Chief executive Nicolas Hieronimus said: "In a challenging environment of geopolitical tensions, inflationary pressures, and a stagnating beauty market in China, we delivered our best like-for-like growth in more than 20 years (excluding 2021).

"This is a clear vindication of the power of our multi-polar model, and I am particularly pleased with the strong acceleration in emerging markets."

At 1030 GMT, the shares were down 5.6% at €427.65.