L’Oréal Signals Renewed Momentum, Eyes Luxury Leadership
Key Takeaways:
Confidence Despite Market Shifts: CEO Nicolas Hieronimus maintained confidence in L’Oréal’s ability to outpace market growth and deliver another year of profit and sales gains, citing digital strength and portfolio expansion as key drivers.
Sales Accelerating, Though Below Forecasts: L’Oréal posted 4.2% like-for-like sales growth in Q3, missing analyst forecasts of 4.9%. However, adjusted growth — excluding IT system changes — met that target at 4.9%, marking sequential improvement from Q1 (2.6%) and Q2 (3.7%).
Recovery Across Core Markets: North America and China both showed signs of rebound. China saw positive growth for the first time in two years, while North America’s 1.4% gain lagged expectations. Europe remained stable, and gains in South Asia Pacific, the Middle East, and North Africa offset Latin America softness.
Divisional Gains & Innovation Strategy: All business divisions contributed to growth, supported by new product launches. L’Oréal emphasized its online strength and continued focus on innovation to outperform a still-expanding global beauty market.
Luxury Focus: Kering Beauty Deal & Niche Fragrances: Days before the earnings release, L’Oréal announced its €4 billion acquisition of Kering Beauté, securing long-term fragrance licenses for Gucci, Bottega Veneta, and Balenciaga, and furthering its ambition to dominate the luxury beauty space. The move follows acquisitions of Medik8 and ColorWow.
L’Oréal’s third-quarter results point to an inflection point. While the world’s largest beauty company missed top-line growth forecasts — posting a 4.2% like-for-like increase against expectations of 4.9% — the adjusted figure, which removes the impact of IT system changes, reached the mark. That 4.9% adjusted growth not only beat the prior two quarters but suggests sequential acceleration as key global markets regain footing.
The real story lies in recovery breadth and forward strategy. Mainland China delivered its first positive growth in two years, and although North America’s 1.4% gain underwhelmed, Europe remained resilient. Stronger performance in South Asia Pacific, the Middle East, and North Africa helped offset softness in Latin America, lending weight to CEO Nicolas Hieronimus’ statement that progress was “broad-based.”
Every division contributed to the upswing, buoyed by increased product launches and stronger digital execution — a point of pride for the group, which continues to lead in e-commerce performance across beauty. Yet the headline figures alone don’t capture the full strategic picture.
Just two days prior to the earnings release, L’Oréal announced a €4 billion acquisition of Kering Beauté, adding long-term licenses for Gucci, Bottega Veneta, and Balenciaga fragrances. The deal positions L’Oréal as a dominant force in niche luxury fragrances, complementing its existing premium holdings — a clear play for market share in one of beauty’s most resilient categories. This follows other recent acquisitions, including Medik8 and ColorWow, signaling a continued push into high-growth segments.
Taken together, Q3 marks more than just a return to momentum — it frames L’Oréal’s next chapter: a convergence of broad-based recovery, targeted acquisitions, and intensified luxury focus. As post-pandemic volatility continues to settle, the group appears to be building its position not only to keep pace with the global beauty market, but to shape it.