L’Oréal Earnings Increase as Lockdowns Ease

Luxury fashion brands have benefitted from growing Chinese and US demand in recent quarters, assisting luxury goods firms like LVMH and L’Oréal in reviving their revenue streams as immunization programs continue and people become more sociable.

The French firm, which also owns brands such as Lancôme and manufactures Armani cosmetics, reported that sales of high-end perfumes were increasing, but makeup income had been struggling for several years.

Nicolas Hieronimus, the group’s new CEO and a former L’Oréal executive who joined the helm in May, told Le Figaro daily that cosmetics and fragrances sales have not yet recovered to pre-2020 levels, despite the fact that the group’s total revenues have increased against 2019.

Some of L’Oréal’s businesses that had struggled in recent years, such as the consumer goods division, which houses products sold in supermarkets, profited from the cosmetics boom. The professional goods segment, which distributes hair salons, also saw a significant increase in sales.

L’Oréal depended on its e-commerce business to reach consumers during last year’s lockdowns, who devoured hair care products and skin lotions, although shop closures harmed sales.

Sales throughout the company were €7.6 billion ($9.03 billion) in the second quarter, up 33.5 percent when currency fluctuations and acquisitions are excluded. This was an increase from 10.2 percent like-for-like sales growth in the preceding three months and above Credit Suisse’s average estimate of 27.5 percent growth.

Hieronimus stated in a statement that the second half of 2021 will see further product releases.

By the conclusion of the first half, operating margins had increased to 19.7 percent of revenues, with operating profit rising 26.8 percent to €3 billion.