The French cosmetics maker has released its second quarter sales revealing that trading was down in Eastern Europe and North America due to less consumer demand.
Sales between April and June reached €4.64bn showing a 4.6 per cent increase on last year, but under the expected growth rate, particularly after a strong first quarter. Having seen revenue in the US grow above market expectation in the first quarter, L’Oreal saw reported figures fall 4.9 per cent in the last three months.
The biggest slowdown came in Eastern Europe, having recorded a slight growth in this region in the first quarter, reported sales tumbled 8.2 per cent. “After several years of growth, the sales trend in Eastern Europe is disappointing in all the countries of this zone, particularly in Russia and Ukraine,” commented CEO Jean-Paul Agon. The zone took another hit this quarter adding to what has been a slow start to the year in what L’Oreal call ‘a dismal economic environment’.
More difficult than expected
This has been attributed to the fact that consumer confidence and market dynamism have proved more difficult than expected, particularly in mass-market and the pharmacy channel.
Furthermore, in this zone, the cosmetics giant claims the launch phasing tends to be focused on the final months of the year. The Luxury Products Division made a good start to the year, thanks in particular to the rebound at Lancôme and another period of strong growth for Kiehl's and for fragrances.
