On Wednesday, L’Oréal Group shared its first quarter of 2023 sales, posting a 13% like-for-like growth year-over-year to over $11 billion.
The press release sharing the results positioned the period as another quarter of market outperformance and stated that sales grew across all divisions, with “outstanding” performance from the Dermatological Beauty and Consumer Products divisions. Brands within those divisions include Essie nail polish, L’Oréal Paris, Garnier, Matrix and Redken. Dermatological Beauty grew by 30.6% on a like-for-like basis year-over-year, while Consumer Products grew by 14.7%. The positive growth of L’Oréal Group comes only a few weeks after the conglomerate announced the acquisition of Aesop from Natura & Co. for $1.2 billion. L’Oréal Group finished off fiscal year 2022 with nearly $42 billion in revenue, a 10.9% like-for-like growth year-over-year, as reported by the company in February.
“In a beauty market that remains very dynamic, L’Oréal has maintained strong growth momentum and posted an excellent first quarter,” said Nicolas Hieronimus, CEO of L’Oréal Group, in a statement. “This performance, which has yet to benefit from China’s reopening, demonstrates the strength of L’Oréal’s balanced multipolar model.”
The Consumer Products division performed well in Europe and North America and continued its strong growth in emerging markets, notably in India, Mexico, Brazil and Thailand. L’Oréal said each of the Division’s global brands recorded double-digit growth, with makeup being the fastest-growing category. Key product callouts included Telescopic Lift Mascara by L’Oréal Paris, Bare With Me Blur Tint foundation by NYX Professional Makeup and the “nude” extension of Maybelline New York’s lipstick Superstay Vinyl Ink. Two of Maybelline’s mascaras and L’Oréal Paris’s Telescopic Lift Mascara were included in the Top 5 buzziest mascaras of March 2023 based on MIV, according to Glossy and Launchmetrics data. MIV is a proprietary Launchmetrics metric standing for media impact value. MIV tracks the impact of influencers, print media, celebrities, official third-party partners and a brand’s own media channels.
The Professional division saw growth across all its distribution channels, including salons, the wholesale distributor SalonCentric network in the United States and e-commerce. Growth was primarily driven by Kérastase, which recently launched its Symbiose anti-dandruff range in January, and Série Expert by L’Oréal Professionnel, with its Metal Detox treatment. According to previous Glossy reporting, investment bank Piper Sandler conducted a survey of 150 nationwide salon professional salons and found they were turning away from Olaplex bond-building products to Kerastase, with 13% of those former Olaplex salons now using the L’Oréal-owned brand, followed by K18, Redken and Kevin Murphy.
Separately, sales in emerging geographical markets, including Latin America, South Asia Pacific, the Middle East, North Africa and Sub-Saharan Africa, grew over 20% on a like-for-like basis year-over-year. Overall, there was double-digit growth in every geographical area except for North Asia due to a reduction of available stock in mainland China at the very beginning of the year; it thus grew by less than 2%. China’s economy grew at a faster-than-expected pace in the first quarter, as the end of strict Covid-19 protocols allowed businesses and consumers to resume pre-Covid-19 daily activities. Gross domestic product grew 4.5% year-on-year in the first three months of the year, faster than the 2.9% in the previous quarter, according to data from the National Bureau of Statistics published on Tuesday. It beat analyst forecasts for a 4.0% expansion and marked the strongest growth in a year. Yet, several beauty brands have exited the mainland China market over the past 12 months, including Too Faced, Huda Beauty and The Face Shop. According to previous Glossy reporting, experts said that stiff competition, due to rapidly changing marketing rules and consumer preferences, is the biggest challenge for beauty brands in the market.
“Mindful of the current uncertainties, we remain optimistic about the outlook for the [global] beauty market, ambitious for the future, and confident in our ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023,” said Hieronimus.