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“We are confident in the L’Oréal business model,” continued Liard. “The company will increase its margin in the long term and will increase sales.”
Another analyst found L’Oréal’s 2008 growth to be “a bit disappointing, especially in the U.S. I am still somewhat concerned that, even excluding the luxury and professional divisions, L’Oréal is underperforming a number of its peers, including Beiersdorf and Unilever.
“I was surprised by the low volume number, although that is likely mainly from luxury, and am wondering what they can do to reinvigorate that,” he said. “With L’Oréal looking more at affordability, you also have to wonder what the combination of the two will mean for total organic growth going forward. It’s early days to talk about margins, but beyond pressure from collapsing volumes in luxury, there are a number of positive factors at play, notably lower input costs and continued cost control.”
On Tuesday, L’Oréal stock closed up 0.59 percent to 53.17 euros, or $66.84 at current exchange.