Enduring demand for luxury skincare products boosted L'Oreal sales in the first quarter, helping the Maybelline maker beat growth forecasts along with a slight improvement in its struggling lower-end product ranges.
The French firm said revenues rose 11.4% to €7.6 billion ($8.58 billion), up 7.7% on a like-for-like basis, that strips out the effect of currency swings and acquisitions.
That beat the 6.6% comparable sales growth forecast in an Infront Data poll of analysts for Reuters, and matched the pace of growth notched up in the last three months of 2018.
Growth Drivers
L'Oreal said thriving demand among Asian shoppers had helped sustain growth. The region has now overtaken North America as the largest contributor to revenue.
In an encouraging sign for rivals like US-based Estee Lauder, L'Oreal cited China as one especially bright spot in the quarter despite its slowing economy. It said that India, Malaysia and India were also doing well.
L'Oreal has been trying to revive its sluggish mass market division, home to its Garnier shampoo ranges, at a time when its higher-end products like Lancome or Kiehl's are finding favour with shoppers seeking anti-ageing treatments for instance.
Consumer Trends
It is not alone in attempting to revamp its middle-of-the-road brands sold in supermarkets, with Nivea maker Beiersdorf also highlighting a consumer trend towards more personalised products that was pressuring this segment.
Cosmetics makers are partly betting on greener ranges with more natural ingredients to try and lure shoppers back.
Comparable sales growth at L'Oreal's mass market unit progressed to 3.3% in the first-quarter from 2.8% in the previous three months - a still sluggish rate, but slightly above expectations.
L'Oreal CEO Jean-Paul Agon said in a statement that the economic environment was "volatile, uncertain" but that the group was encouraged by its start to the year. It maintained its goal of outperforming the broader beauty market.
News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.
