Paris - L’Oreal SA, the world’s largest cosmetics maker, reported a 14-percent increase in first-quarter sales as a weaker euro helped compensate for “sluggish” growth in western Europe.
Revenue reached 6.44 billion euros ($6.92 billion), the Paris-based maker of Maybelline eye shadow said on Monday in a statement after markets closed. Analysts predicted 6.35 billion euros, according to the median of estimates compiled by Bloomberg. The strength of currencies such as the dollar boosted the value of revenue from abroad.
L’Oreal, which has made a dozen acquisitions since 2013, is benefiting from the euro’s slump after currencies weighed on performance in the past two years. Sales growth, which was led by the luxury and active-cosmetics divisions in the first quarter, will probably accelerate this year as the consumer unit starts to feel the effects of a rebound in North America, Chairman Jean-Paul Agon said on a call with analysts.
“Western European consumer appears to have been a weak spot,” Jeff Stent, an analyst at Exane BNP Paribas in London, said in a note to clients. “This is offset elsewhere.”
Europe, the source of about a third of revenue, “has had a difficult start to the year”, L’Oreal said, citing a slight decline in the mass market in the region.
Excluding acquisitions, disposals and currency swings, sales climbed 4 percent in the quarter. The median analyst estimate was for growth on that basis of 3.9 percent.
All divisional sales came in ahead of estimates on a like-for-like basis, except the consumer-products unit, where a 1.7 percent gain was shy of the 2.6 percent predicted by analysts. L’Oreal attributed the underperformance at the unit that makes Garnier shampoo to Europe.
“In an economic context that is still volatile, we confirm that we are confident in our ability to outperform the market this year, once again, and to achieve growth in sales and profit,” L’Oreal also said.
Bloomberg