The share of cosmetics giant L'Oréal fell by more than 6% on Friday on the Paris Stock Exchange, after presenting results lower than analysts' forecasts in the fourth quarter.
L'Oréal published progress results for 2023 on Thursday evening, with an increase of 8.4% in its net profit, to 6.2 billion euros, and of 7.6% in its sales, to 41.2 billion euros.
However, investors rather noted the weak growth in overall sales in the fourth quarter with even a decline in sales in North Asia (-6.2%).
Around 9:50 a.m., L'Oréal shares lost 6.40% to 424.25 euros.
Fourth-quarter revenue fell short of estimates, according to a note from analysts at RBC Capital Markets, who point out that sales in
"North Asia and Europe are not meeting expectations significantly
. "
The North Asia region, which includes China,
“has been affected by persistent challenges”
particularly in tourism,
“as well as by the decline of mainland China”
, specify Jefferies analysts.
Read alsoL'Oréal becomes number one in luxury cosmetics and dethrones Estée Lauder
Disappointment in China
Consumption in China
“disappointed”
with a slower recovery than expected, conceded the general director of L'Oréal, Nicolas Hieronimus, who however clarified that he was
“not at all worried about the future”
.
“There are still 275 million people who will enter the middle classes and consumers are becoming more sophisticated
,” according to him,
“there is a real appetite for quality things
,” he said Thursday evening.
Analysts are more cautious:
“We are not sure that other regions can sustainably compensate for the challenges in Asia, given the weakness of the underlying market and the strong penetration of L'Oréal in China
,” say the analysts. RBC Markets analysts.
“We continue to think that expectations (...) are too high while growth in the beauty market is normalizing”
in Asia, add Jefferies analysts.