L‘Oréal confident after sales rise

L‘Oréal, the world‘s largest cosmetics group, said on Thursday that it looked forward to this year “with confidence” after a rise in sales at the end of 2014.

The French company announced that fourth quarter sales were up 4.9% like-for-like, beating the 3.6% increase predicted by analysts as well as the 2.3% increase in the previous quarter. The result should prove a boost to Chief Executive Officer Jean-Paul Agon who, in November 2014, had predicted global cosmetics growth would be closer to 3%. L‘Oréal‘s like-for-like revenue rose 3.7% last year, the slowest pace since 2009.

Net profit for 2014 was €4.9bn, well up from €2.96bn in 2013. However, this boosted by a €2.1bn capital gain on the sale of L‘Oréal‘s share of skincare joint-venture Galderma in exchange for the return of some of its own shares by Nestlé. This saw the Swiss food group reduce its stake in the manufacturer of brands such as Maybelline and Lancôme from 29.4% to 23.3%.

For the year, sales rose by 1.8% to €22.5bn, and by 3.7% like-for-like, which was slightly higher than expectations. This was driven by its luxury division — including Yves Saint Laurent fragrances and dermocosmetics, such as Vichy.

Net sales for the year rose 1.8% to €22.5bn and 3.7% like-for-like, slightly higher than expectations. This was driven primarily by its luxury division including Yves Saint Laurent fragrances and Vichy dermocosmetics.

In the fourth quarter ,“L‘Oréal saw all regions deliver growth above our expectations,” Andrew Wood, an analyst at Sanford C. Bernstein, told Bloomberg. L‘Oréal‘s share price was up by more than 2% at beginning of trading today.

Hermine de Bentzmann, an analyst at Raymond James, stated that profits this year should be also boosted by the weaker euro and greater consumer purchasing power in the United States, where L‘Oréal makes around a quarter of its sales, due to lower petrol prices.


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