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L'Oreal First-Qtr. Sales Inch Ahead 2.1 Percent... Makeup, Men’s Perform Well in Germany

On the back of a difficult trading environment in North America and a strong euro, L’Oreal reported first-quarter 2008 sales of 4.36 billion euros, or $6.53 billion at average exchange, up 2.1 percent over the same period last year. On a...

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Jean-Paul Agon

Jean-Paul Agon

Photo By WWD Staff

PARIS — On the back of a difficult trading environment in North America and a strong euro, L’Oréal reported first-quarter 2008 sales of 4.36 billion euros, or $6.53 billion at average exchange, up 2.1 percent over the same period last year. On a like-for-like basis, revenues gained 5.1 percent.

The net impact of changes in consolidation — primarily the acquisitions in the U.S. of PureOlogy, Beauty Alliance, Maly’s West and Columbia Beauty Supply, and in Turkey, of Canan — was 2 percent.

“In the first quarter, we achieved globally satisfactory growth: excluding North America, where the environment was exceptionally difficult, the group achieved growth of 7.5 percent, in line with our projections,” stated Jean-Paul Agon, chief executive officer of the company.

“In North America, after an exceptional fourth-quarter 2007, we had been anticipating a lackluster first quarter,” he continued. “In fact, it turned out to be more difficult because of lower footfall in department stores and larger-than-expected inventory reductions by our distributors.”

First-quarter sales for L’Oréal in North America fell 7.2 percent to 893 million euros, or $1.34 billion. On a like-for-like basis, they dropped 3.9 percent.

“The rest-of-the-world zone continued to grow very strongly, particularly in Asia and Eastern Europe, and is fully playing its role as a powerful growth relay,” continued Agon. “In Western Europe, the start of the year is in line with our expectations in a market which remains solid.”

In the period, the rest-of-the-world zone’s business hit 1.29 billion euros, or $1.93 billion, up 12.1 percent, or 16.7 percent on a comparable basis. Of that, L’Oréal’s Asian business reached 464 million euros, or $695 million, up 13.7 percent, or 21.9 percent on a like-for-like basis. In Eastern Europe, the company registered revenues of 359 million euros, or $537.7 million, a 24.1 percent gain, or 25.9 percent growth on a comparable basis.

In Western Europe, L’Oréal posted sales of 1.94 billion euros, or $2.9 billion, up 1 percent, or 2.3 percent on a like-for-like basis.

Currency fluctuations negatively impacted L’Oréal’s sales by
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