L’Oreal, the French cosmetics company, reported sales and profits that fell short of analysts’ expectations for 2023. This challenging year was influenced by geopolitical tensions, inflation, and a stagnant beauty market in China. However, L’Oreal expressed confidence in its ability to outperform the market in the current year.
Sales Performance
For the year, L’Oreal recorded sales of €41.18 billion ($44.37 billion), reflecting a 7.6% increase in reported terms and an 11% increase on a like-for-like basis. Notably, sales in Europe rose significantly, climbing 13.7% in reported terms to reach €13.01 billion. L’Oreal attributed this growth to a highly dynamic beauty market, making Europe the primary driver of growth for the second consecutive year.
Similarly, in North America, L’Oreal observed growth across all divisions, particularly in dermatological beauty and L’Oreal Luxe, leading to a 9.7% revenue increase to €11.15 billion. The company highlighted the success of its skin care brands, CeraVe and La Roche Posay, within the dermatological beauty division, while L’Oreal Luxe excelled in the fragrance market with products like Born in Roma by Valentino and MYSLF by Yves Saint Laurent.
Sales in Latin America experienced a substantial surge of 22.8% to reach €2.92 billion. However, North Asia faced a setback with a 5.8% decline in revenue to €10.66 billion due to struggling market conditions in mainland China.
During the fourth quarter, global sales saw a modest increase of 2.8% in reported terms and 6.9% on a like-for-like basis, reaching €10.61 billion.
Profit Growth
L’Oreal’s annual net profit rose by 8.4% to €6.18 billion, while operating profit increased by 9.2% to €8.14 billion, closely monitored by analysts and investors. At the upcoming annual general meeting on April 23, the company plans to propose a dividend of €6.60 per share, an increase from the previous year’s €6.00.
Outlook for 2024
Looking ahead to 2024, L’Oreal expressed optimism about the beauty market’s future prospects. Chief Executive Nicolas Hieronimus stated, “We remain confident in our ability to outperform the market and achieve another year of sales and profit growth.”