L’Oreal, home to Maybelline, Lancome and Garnier, predicts the upcoming new normal post-pandemic will lead to a strong rebound on cosmetics sale. On Friday, the company announced a higher than expected fourth-quarter sales growth, which successfully boosted its shares higher.
L’Oreal: partial sales rebound on cosmetics noted
L’Oreal took a hit from the COVID-19 pandemic lockdown. With the closing of hair salons due to lockdown, the cosmetics company became wary of its prospects of the market. Though, L’Oreal proved that they would still be able to keep itself afloat for the time being.
L’Oreal predicts its 4.8% sales growth from the past three months of 2020 would still continue to the first quarter of 2021. With the distribution of COVID-19 vaccines and slowing virus spread, L’Oreal CEO and Chairman Jean-Paul Agon is positive cosmetics sales would accelerate sharply.
“People will be happy to go out again, to socialise,” Agon said upon the company’s results presentation. He added, “this will be like the Roaring 20s, there will be a fiesta in makeup and in fragrances,” which refers to the 1920s post-war economic boom which led to the trend of daring fashions and parties, Reuters notes.
L’Oreal noted an especially strong sales in China. With fewer restrictions on the country, China’s sales inclined 27% in 2020. Accordingly, L’Oreal’s shares also went up 2.9% at 10.25 GMT. It boosted L’Oreal into among the strongest performers on France’s benchmark CAC-40 index.
L’Oreal saw a rise in shares following the announcement
While pandemic has caused a significant loss in luxury retailers and beauty companies, especially make-up sales, skin care products and pampering treatments saw a rise. More people have also opted for online shopping during the pandemic. L’Oreal revealed a 62% jump in online revenues in 2020, which accounts for more than a quarter of total sales. In China alone, the company noted 56% incline in online sales in 2020.
On Thursday’s report, L’Oreal announced to have reached 7.88 billion euros (9.5 billion) from October to December. Quoted from Reuters, the figure is accounted flat from last year on a reported basis but up by 4.8% on a like-for-like basis, excluding currency effects and acquisitions.
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