L’Oreal sales below forecasts

City A.M. Reporter
FRENCH cosmetics maker L’Oreal reported second-quarter sales below market expectations, hit by a slowdown in trading in North America and eastern Europe.

The maker of Lancome lipstick, Biotherm creams and Garnier shampoos saw its second-quarter sales rise 4.6 per cent, while analysts had expected an increase of between 5.5 and six per cent.

Revenue from eastern Europe, which rose 0.7 per cent in the first quarter, was down 8.2 per cent in the second quarter to €325.3m (£289m) on a reported basis.

“It is the first time in many years that we are seeing difficulties in eastern Europe,” L’Oreal chief executive Jean-Paul Agon said. He partly blamed the region’s problems on its economic woes.

Revenue in North America, L’Oreal’s biggest market, fell 4.9 per cent on a reported basis, having grown 12 per cent in the first quarter. Agon declined to give a forecast for the year and would only say the group was confident it could improve sales and profits and beat the market’s average growth rate.

“We think the growth of the market will be around four per cent in the second half,” said Agon.