As the world’s largest beauty company, L’Oréal has major interests in both sides of the business – prestige and mass – through its luxury and consumer products divisions.

Media giant Bloomberg predicts that this across-all-categories spread will shore up the multinational’s performance during the current global pandemic.

L’Oréal thinks the same.

China is its largest single market and the company is already seeing a recovery in beauty product consumption since the Chinese government started lifting the lockdown, says Jean-Paul Agon, chairman and CEO.

“As the experience of China has shown, the current situation does not call into question consumers’ strong appetite for beauty products, which remains intact,” he added.

The company is confident it will return to double-digit sales growth in China in its second fiscal quarter.

The French giant has reported a 5 per cent fall in global sales for Q1 2020, as major nations worldwide have experienced the closure of specialist beauty chains, department stores and airport retailers during the COVID-19 outbreak.

L’Oréal’s Professional products division was hard hit with a 10.5 per cent slump in sales over the same period in 2019 to 751.1 million euros (US$816.36 million), following the shuttering of hair and beauty salons in many countries.

The Luxe division, including the Lancôme, Kiehl’s, Giorgio Armani and YSL Beauty brands, saw revenues dip 9.3 per cent to 2.68 billion euros (US$2.91 billion) for the quarter.

The Active Cosmetics division, including La Roche-Posay, SkinCeuticals and Vichy, also reported a decline of 13.2 per cent to 840 million euros (US$912.9 million).

L’Oréal Paris is the world’s number one beauty brand and is the linchpin of the Consumer Products division, alongside Maybelline New York and Garnier.

Q1 global sales slipped 3.6 per cent to 3.17 billion euros (US$3.44 billion).

Online sales, which have been escalating rapidly for L’Oréal in recent years to account for 13 per cent of total global sales, was a major winner in the first quarter.

Revenues in this channel rose 50 per cent to represent 20 per cent of the multinational’s revenues for the period.

In an environment that is evolving every day, lockdown measures will clearly continue to have a significant impact on the consumption of skin care and beauty products on our business in the second quarter, said Agon.

 “The market should recover quickly as soon as measures to close sales outlets are lifted. Based on previous experience that we have had, when consumers will be able to shop again, and to get access to their brands, beauty will be back to very good consumption levels.”

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