L’Oreal shares down 7% on lower-than-expected sales, slowdown in Asia

Balint Porneczi/Bloomberg | Getty Images

LONDON — L’Oreal shares fell more than 7% Friday, before slightly paring losses, as the company reported lower-than-expected sales and pointed to a slowdown in demand in Asia.

The world’s largest beauty brand on Thursday reported fourth-quarter sales below estimates, rising 2.8% to 10.6 billion euros ($11.4 billion). Barclays analysts had anticipated a figure near 10.9 billion euros, according to Reuters.

The company, which owns brands such as Lancôme and Kiehl’s, also logged a 7.6% increase in 2023 full-year sales to 41.18 billion euros ($44.37 billion).

The quarterly shortfall was led by activity in North Asia, including China, where sales fell 6.2% over the three-month period. Sales were otherwise up in Europe and North America.

CEO Nicolas Hieronimus said Friday that the company remains very ambitious in China, adding that it has strong growth plans for the country in 2024 and beyond, according to Reuters.

The luxury sector has been under pressure since late 2023, as tough macroeconomic and geopolitical conditions have weighed on consumer spending, notable in the U.S. and China.

Hermes jumps

Still, certain high-end brands appear to have bucked the trend, continuing to attract increasingly selective shoppers.

Shares of Hermes were up 5.1% Friday after reporting a surge in sales as wealthy consumers continue to seek its exclusive Birkin handbags and silk scarves despite rising prices.

Fourth-quarter revenues rose 18% at constant exchange rates to 3.36 billion euros, while full-year revenues were up 21% to 13.42 billion euros. The company also announced plans for an exceptional dividend of 10 a euro share.

Speaking Friday, Executive Chairman Axel Dumas said product prices were likely to rise by an average of 8% to 9% in 2024, according to Bloomberg, which he said was indicative of the company’s continued appeal in an increasingly “polarized” market.

Hermes stock is currently up more than 13% for the year, ahead of LVMH, up 11%, and Burberry, down 8%.

Source link

Recommended For You

About the Author: Tony Ramos

Tony Ramos is a seasoned expert in business funding and real estate investment, with a remarkable journey spanning over 20 years. His expertise in flipping properties and implementing the buy-and-hold strategy has positioned him well in the real estate investment sector. Tony's profound understanding of financial strategies extends to teaching individuals and businesses how to become debt-free and leverage the power of LLCs for funding. For insights, mentorship, or collaboration opportunities, Tony can be reached at businessfundingnopg@gmail.com. Connect with him to unlock the potential of smart financial strategies and embark on a path to financial success and freedom.

Leave a Reply

Your email address will not be published. Required fields are marked *