L’Oréal Group’s earnings results for the first half of 2023, released on Thursday, revealed a 13.3% year-over-year increase in sales, with consumer products and skin care especially contributing to growth.
Nicolas Hieronimus, CEO of L’Oréal Group, said the company’s “multi-polar model” contributed to growth in all divisions, regions and categories.
The category seeing the biggest leap was the company’s dermatological beauty division, which includes La Roche-Posay, SkinCeuticals and CeraVe. The category saw 29% year-over-year sales growth, with “particularly impressive” performance in Europe and a recovering market in mainland China, according to the results. La Roche-Posay was the division’s “No. 1 growth contributor,” while TikTok-famous CeraVe kept up its sales strength in North America and globally.
Multiple TikTok-viral products were mentioned as growth drivers for the company’s consumer products division, which saw the second-highest sales growth among L’Oréal Group categories, with a 15% year-over-year sales increase in the first half of the year.
These products included the Nyx Professional Makeup Fat Oil Lip Drip, which launched this spring and became the No. 1 bestseller among beauty and personal care new releases on Amazon in April 2023. The Telescopic Lift Mascara by L’Oréal Paris, meanwhile, was also listed in the report after going viral on TikTok despite being the subject of the “mascaragate” scandal of beauty influencer Mikayla Nogueira earlier this year.
There was also Maybelline’s Falsies Surreal Mascara, which launched in February this year with a campaign that jumped in on the virtual influencer marketing trend. Alongside Gigi Hadid, a digital avatar was leveraged to promote the product.
Europe, Mexico, Brazil and India were listed as high-growth markets for this category.
Asia also saw growth as mainland China’s beauty market “continued its progressive recovery in the second quarter” and China tourists returned to Hong Kong, according to the report.
Travel retail in the “North Asia” region was “affected by the base effect of last year’s anticipated invoicing” that resulted from the company’s travel retail business unit relocating from Hong Kong to Singapore in 2022, said the report. In addition, “sell-out was adversely impacted by travel retail operators’ wide-ranging refocus on a model with the individual traveler at its core,” as opposed to third-party sellers.
The travel retail category has had an impact on the bottom line of multiple beauty and luxury conglomerates. In May 2023, Estée Lauder Companies’ quarterly results cited a “slower-than-expected recovery in Asia travel retail” as a reason for its 12% net sales decrease for the quarter.
But there are signs of recovery. On July 25, LVMH reported in its H1 2023 recent earnings report that its beleaguered travel retailer DFS has returned to profit, thanks in part to Chinese tourists heading back to Hong Kong and Macau.