L'Oreal sees sales grow for first time since January

Reuters

Published Jul 31, 2020 05:38AM ET

PARIS (Reuters) - L'Oreal's (PA:OREP) sales rose in July for the first time since January, Chief Executive Jean-Paul Agon said on Friday, striking a more upbeat tone for the rest of the year with signs of a turnaround in China.

Temporary store closures and depressed demand during lockdowns to fight the coronavirus pandemic resulted in a sharper-than-expected 18.8% fall in second-quarter comparable sales, the owner of the Maybelline and Lancome brands said.

A recovery in China, L'Oreal's biggest market, and booming online sales of skincare products and hair tints across other markets, which have continued to thrive even as retailers re-open, would help earnings improve, the company said.

L'Oreal shares were up 1.3% at 0837 GMT after falling in early trading.

"The world will likely not experience lockdowns in a similar way to the first half, stores will likely remain open," Agon told a conference call with analysts.

L'Oreal was hit as department stores shut their doors temporarily and airport duty free shopping dropped off a cliff during the height of coronavirus lockdowns.

Make-up sales were hit particularly hard as consumers stayed at home, but shoppers still bought some cosmetics online and stocked up on other products. L'Oreal's e-commerce revenues accounted for a quarter of all sales, up from just under 16% at the end of 2019.

Agon said L'Oreal had trimmed costs by freezing staff headcount and clamping down on travel, and had cut out some expenses in stores. These included make-up testing displays, which consumers were not using during the crisis.