L’Oréal Shares Fall After ‘Notable’ Quarterly Sales Miss

L’Oréal shares fell more than 5% on Wednesday after the French cosmetics group posted third-quarter sales that missed expectations and analysts flagged signs of weakening momentum despite a recovery in key markets.

The world’s largest beauty company reported €10.33 billion in sales for the quarter, up 4.2% on a like-for-like basis, but only 0.5% on a reported basis, bringing nine-month revenue to €32.8 billion, a 1.2% increase year on year. 

Currency headwinds knocked around 2.8% off sales.

Jefferies analyst Molly Wylenzek described the results as a “notable miss,” saying that growth came in 50 basis points below consensus estimates. 

Jefferies maintained its Underperform rating on the stock with a €340 price target, warning that a “lack of momentum” could continue to weigh on shares.

L’Oréal said the company’s like-for-like growth accelerated to 4.9% in the third quarter, driven by progress across all regions and divisions. 

“Our strength online allows us to outperform what is today the most dynamic channel,” L’Oréal CEO Nicolas Hieronimus said. “We are confident we will continue to outperform the global beauty market and achieve another year of growth in sales and profitability.”

Growth was strongest in haircare and fragrances, while makeup continued to recover. Regionally, the company saw renewed strength in North America and mainland China, while Europe remained “robust.”

L’Oréal also highlighted its new €4 billion partnership with Kering, which includes the acquisition of the House of Creed and long-term beauty licenses for Gucci, Balenciaga and Bottega Veneta, as part of its push to strengthen its luxury portfolio.