Paris (France) (AFP) – L’Oreal shares fell heavily on the Paris stock market on Friday after the cosmetics giant posted sales that fell short of analyst expectations, stoking fears of weakness for its luxury brands and in the key Chinese market.
While revenues rose seven percent in the fourth quarter in Europe — still the company’s biggest market — they edged up just 0.7 percent in North America and fell five percent in North Asia, which includes China. Overall, sales were up 1.5 percent to 11.2 billion euros ($13.3 billion) in the final quarter of 2025 — usually when the company benefits from strong holiday-fueled buying. This was a marked slowdown from the 4.5-percent growth seen the previous year.
On a like-for-like comparison that excludes the impact of currency fluctuations, sales rose six percent, whereas the consensus forecast was around eight percent, analysts said. The luxury division (Luxe) in particular, which includes high-end perfumes and makeup and is L’Oreal’s biggest by revenue, saw a 0.5-percent sales slide in the fourth quarter, to 4.2 billion euros.
“We think the miss, led by North Asia and Luxe, will be a concern amid a vague outlook,” said David Hayes, an analyst at investment bank Jefferies. L’Oreal’s stock was down 3.2 percent in morning trading, partly recovering from a drop of more than six percent at the open.
Net profit for the full year was down 4.4 percent to 6.1 billion euros. Chief executive Nicolas Hieronimus said when he presented the results on Thursday that L’Oreal had achieved a “solid” performance “despite a context that was at the very least volatile and unfavorable.”
For 2026, he said the company had to be “cautious and humble,” although he expected “the beauty market to continue its acceleration” unless there was “a new surprise.” “We’re going to have to intensify our efforts in terms of innovation to energize the market and win over customers,” he added.
© 2024 AFP
