L’Oreal confident beauty will beat inflation beast

French beauty products giant L’Oreal beat third-quarter sales expectations and expressed confidence Thursday about the outlook despite global economic uncertainty and rampant inflation.

Sales at the world’s top beauty company shot 19.7 percent higher in the July through September period to 9.58 billion euros ($9.34), beating the analyst consensus of 9.29 million compiled by Bloomberg.

“In a context of unprecedented volatility, marked by the public health restrictions in China and inflation in the Western world, L’Oreal achieved a very solid quarter,” said chief executive Nicolas Hieronimus.

“The global beauty market remained dynamic, and consumers’ appetite for beauty products is intact,” he added.

Nine-month sales were up 20.5 percent to 27.94 billion euros at the firm that owns the Maybelline New York and Garnier brands.

“Despite the current uncertainties, we remain confident in the outlook for the global beauty market … and confident in our ability to outperform the market and achieve another year of growth in sales and profits in 2022,” Hieronimus added.

Although high inflation and interest rate hikes are causing concern about Europe and the United States slipping into recession, L’Oreal enjoyed double-digit growth in both regions.

North Asia was flat, held back by China.

“As a consequence of the sanitary restrictions linked to the zero-Covid dynamic in China, the beauty market was still negative in the third quarter,” said the firm.

It noted that the beauty market in Japan and South Korea had posted a double-digit rebound after Covid restrictions were lifted.

L’Oreal has been repositioning itself towards the luxury market, and the unit saw sales rise 15.8 percent in the quarter.

The division includes Lancome and Kiehl’s as well as the beauty products of luxury brands such as Giorgio Armani, Prada, Ralph Lauren and Yves Saint Laurent.

The company also benefited from the weakness of the euro, with currency effects having a +8.1 percent impact.

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