L’Oreal’s Q4 Sales Exceed Expectations

L’Oréal’s fourth-quarter sales exceeded analyst expectations, allaying fears over how the slowing Chinese economy will affect the beauty industry.

Bloomberg reported that sales for the last quarter of 2018 went up 7.7 percent on a comparable basis, beating analysts’ expectations of 6.5 percent.

And while there were concerns over how China’s economic slowdown would impact the industry – especially high-end beauty – the company’s divisions that sell premium and luxury skincare brands both saw an increase in the double digits. In addition, sales in its largest division, which offers mass-market brands like L’Oréal Paris, did better than expected.

The company is also making strides online, with eCommerce sales rising 41 percent last year as the company experimented with sponsoring popular beauty bloggers, sharing make-up tutorials on Instagram and hosting live events on Alibaba’s Tmall.

Last year, the company also started upping its technology game by partnering with La Roche-Posay on the release of My Skin Track UV, which measures the UV exposure a person’s skin has undergone. The two brands are collaborating again in 2019 to officially launch My Skin Track, the first wearable sensor and companion app to easily measure personal skin pH levels and create customized product regimens to better care for skin.

“Both are tools that can be used to help better understand your skin and help craft customized regimes that keep your skin healthier,” explained L’Oréal Global Vice President of the L’Oréal Technology Incubator Guive Balooch.

L’Oréal is reportedly also teaming up with Facebook to conduct virtual tests using augmented reality, which will allow customers to see how they look with different makeup, such as eye shadow or lipstick colors.

It’s expected, though, that Chief Executive Officer Jean-Paul Agon will face some tough questions at a meeting on Friday (Feb. 8) about the company’s shareholding, with activist investor Dan Loeb pressuring Nestle SA to sell its stake in L’Oréal.