L’Oréal reveals record results and claims top spot in luxury beauty
12 Feb 2024 --- L’Oréal has reported a third consecutive year of double-digit growth and another year of market outperformance as the company achieved further improvement in its operating margin in 2023.
The French personal care giant recorded ∼€41 billion (∼US$44 billion) in sales (+7.6% reported and +11.0% like-for-like) and ∼€8 billion (∼US$7 billion) in operating profit.
Double-digit like-for-like growth was achieved across all divisions and regions, except North Asia, which continued to be impacted by market softness in mainland China and the reset in Travel Retail (duty-free shopping).
“In a challenging environment of geopolitical tensions, inflationary pressures and a stagnating beauty market in China, we delivered our best like-for-like growth in more than 20 years (excluding 2021),” says L’Oréal’s CEO Nicolas Hieronimus.
“This [performance] is a clear vindication of the power of our multi-polar model, and I am particularly pleased with the strong acceleration in emerging markets.”
Noteworthy performances were reported in the Consumer Products and Dermatological Beauty divisions, while L’Oréal says its Luxe division has become the global market leader in luxury beauty by sales.
Fragrance frenzy
The L’Oréal Luxe division grew in double digits, driven by investment in its complementary brand portfolio and omnichannel strategy, which now includes Amazon in the US. The division attributes its leading market position to momentum in developed and emerging markets and outperformance in China.
In China, the company points to its early adoption of social media app Douyin and ongoing investment in point-of-sale quality as important success factors.
L’Oréal notes strong growth in emerging markets but market softness in China posed challenges.
Fragrances remained the division’s star performer in 2023, inspired by Yves Saint Laurent with the worldwide blockbuster Libre and the Myslf launch.
Last week, L’Oréal and Prada signed a global long-term license agreement for the creation and distribution of Miu Miu’s luxury beauty products. Following its partnership with Prada, Miu Miu will join L’Oréal Luxe, with the first fragrances under L’Oréal expected to be launched in 2025.
Many fragrance firms enjoyed a strong year amid record-breaking sales and mergers and acquisitions.
Tech-inspired future
In November 2023, L’Oréal presented its latest tech-enabled offerings and partnerships at the China International Import Expo in Shanghai, one of the world’s largest trade shows, with a record 18 beauty tech innovations spanning inclusive, sustainable and personalized Beauty Tech solutions.
At the same time, the company announced an industry-first partnership with Cosmo International Fragrances to develop a Green Sciences-based extraction process to revolutionize the art of fine fragrance creation.
“As we head into 2024, we remain optimistic about the outlook for the beauty market and confident in our ability to keep outperforming it and to achieve another year of growth in sales and profits,” says Hieronimus.
“More than ever, L’Oréal is looking to the future — a future that will have Beauty Tech at its core. Beauty Tech will shape our industry and enable us to further strengthen our leadership. It will allow us to know our consumers ever-better, to bring them ever-more impactful and sustainable products and services and to become ever-sharper in our execution.”
L’Oréal is the only company in the world to have been awarded a triple “A” rating by the Carbon Disclosure Project for eight consecutive years.
In January 2023, a consortium of 15 cosmetics industry companies, including L’Oréal, joined forces to create the Traceability Alliance for Sustainable CosmEtics to enhance traceability in key ingredient and packaging supply chains across the industry.
By Joshua Poole
