L’Oréal generated €7.03m in sales for the third quarter (Q3) of 2020, up 1.6% on a like-for-like on the previous year, though sales were down 2.5% across Western Europe – the only global region to report declines on a like-for-like basis. Like-for-like Q3 sales were up 7.7% for Eastern Europe; up 8.6% for Africa and Middle East; up 1.3% for North America and 8.7% in Latin America; and up 2.4% in Asia Pacific.
On a divisional basis globally, the strongest growth for Q3 came from L’Oréal Active Cosmetics, with a like-for-like sales growth of 29.9%. CeraVe was the top performing brand for the quarter – up 82%. Growth in the Active division was followed by a sales rise of 11% in Professional Products; and then Consumer Products which was up 0.8%. L’Oréal’s Luxe division, however, reported a decline of 6.2%.
France, Germany and UK return to growth
Despite overall declines across Western Europe, L’Oréal said many countries in the region had returned to growth in the quarter, notably France, Germany and the UK. Spain, however, remained “negatively impacted by the drop in summer tourism”, travel retail outlets in the region had continued to suffer, and the makeup category remained “depressed”.
L’Oréal had rolled out “major recovery plans to enhance brand visibility during the period” which had led to steady growth in Consumer Products, it said, and certain brands like Garnier and L’Oréal Paris had gained market share.
For Eastern Europe, the Czech Republic, Hungary, Israel and Romania “achieved significant growth” and in Africa and the Middle East, Egypt and Morocco performed well amid ongoing market difficulties in Saudi Arabia.
Beauty market ‘still on the road to recovery’
Jean-Paul Agon, chairman and CEO of L’Oréal, said the return to growth globally in Q3 was thanks to the “determination and relevance of the strategic choices taken in all divisions and geographic zones”.
“After a first half marked by a crisis of supply, linked to the closure of points of sale around the world, L’Oréal put everything in place, as early as June, to stimulate demand for its brands and products and to re-engage all its business drivers,” Agon said.
“All of the launches initially planned went ahead, business drivers and media investments were strengthened and ‘Back to Beauty’ plans were deployed with our distribution partners everywhere, in brick-and-mortar and e-commerce, to stimulate the return to consumption.”
“…All these initiatives enabled us to significantly outperform a beauty market which is still on the road to recovery.”
L'Oréal brands have seized market opportunities
Speaking to analysts on the Q3 earnings call last week, Agon said: “We are pretty happy with the strategy that we chose, and the bet that we took.”
Overall, L’Oréal had performed particularly well in skin care, he said, where its brands had seized market opportunities and were “on the offensive”.
Agon said the subsequent return to growth was also “evidence of consumers’ robust appetite for beauty products” and L’Oréal innovations.
Overall, in a sanitary environment that remained “difficult and uncertain”, he said the Q3 results strengthened L’Oréal’s ambition to achieve like-for-like growth in the second half of 2020, though he told analysts on the earnings call the company had to remain cautious regarding the bounce-back of the COVID-19 pandemic.