L’Oreal, the French company behind Lancome and Maybelline Cosmetics, announced on Thursday that, thanks to strong demand in China and booming online sales, sales had grown again in the third quarter.
Like companies in the luxury goods sector, L’Oreal was hit by the coronavirus lockdown earlier this year, when shops and retailers at the airport closed. It has also been hurt by hair salons that have had to temporarily close as they sell professional products.
The company exceeded market expectations from July to September with sales of 7 billion euros.
This corresponds to an increase of 1.6 percent over the previous year on a comparable basis, which excludes currency effects and acquisitions, compared to a decrease of 19 percent in the previous quarter.
Analysts had expected revenue to improve, but would continue to decline year over year.
However, the biggest driver for the improvement was not L’Oreal’s best-known make-up brand, but the active cosmetics division is suitable for dermatological diseases with brands like Vichy and La Roche Posay.
Sales growth in the luxury products division of L’Oreal, where Lancome is based and manufactures cosmetics for Armani, lagged behind that of other divisions and remained in negative territory. This is partly due to the effects of travel restrictions.
L’Oreal remained optimistic about the outlook for beauty products throughout the coronavirus crisis and despite concerns that the government has passed bans would deter people from wearing makeup.
L’Oreal announced on Thursday that like-for-like sales growth is expected in the second half of 2020.
The growth in China and Brazil was particularly strong in the third quarter. Luxury goods brands from Hermes to Louis Vuitton have also pointed to strong demand in Asia as COVID-19 restrictions ease.