L’Oréal SA’s fourth-quarter sales fell short of analysts’ estimates after demand in the US failed to make up for a continued downturn in China.
Sales overall rose 2.5 percent on a comparable basis in the period, the cosmetics company said in a statement. Analysts had expected a 3.8 percent gain. Revenue in North America only grew 1.4 percent, while the region including China continued to experience a drop.
“We expect the shares to react negatively,” when the market opens in Paris on Friday, Molly Wylenzek, an analyst at Jefferies, wrote in a note. L’Oréal’s American Depository Receipts slid as much as 2.4 percent in mid-day trading in New York.
L’Oréal and the wider beauty industry have been suffering from a steep slowdown in China where consumer confidence has been hurt by a property crisis as well as youth unemployment.
That said, L’Oréal’s results were more resilient than those of Estée Lauder Cos., which earlier this week announced plans to cut up to 7,000 jobs after predicting that sales in the current quarter will slide by up to 12 percent due to continued underperformance in its duty-free business in Asia.
The industry now has to contend with the threat of potential US tariffs under President Donald Trump.
L’Oreal’s operating profit in 2024, meanwhile, rose to €8.69 billion ($9 billion), slightly higher than analysts’ estimate of €8.65 billion.
Separately, the company said Francoise Bettencourt Meyers, 71, whose family has a controlling stake in L’Oréal, has decided to not seek a renewal of her board seat when it expires in April. She will be replaced by Alexandre Benais, who heads her family’s investment vehicle Tethys Invest, after a vote at the company’s annual general meeting.
The family controls L’Oréal via its 35 percent stake, which gives it a fortune estimated at about $76 billion in the Bloomberg Billionaires Index.
By Angelina Rascouet
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