In major news on French stocks, L’Oréal S.A. (FR:OR) reported 9.4% like-for-like growth in its sales for the first quarter of FY24, surpassing analysts’ expectations of 6.6%. At the end of Q1, the company’s sales totalled €11.24 billion, underscoring a strong performance of its mass-market products and dermatology offerings despite a temporary slowdown in the luxury segment. L’Oréal shares gained 1.28% on Thursday and surged over 5% today, as of writing.
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Based in France, L’Oréal is a leading global cosmetic brand, offering a wide range of products tailored to meet makeup, haircare, and skincare requirements.
Strong Start: L’Oréal’s Q1 2024 Performance
L’Oréal started Fiscal 2024 on a high note with double-digit growth in Europe and North America, along with robust sales in emerging markets and a slight recovery in North Asia. Europe saw a like-for-like sales growth of 12.6%, North America 12.3%, SAPMENA (South Asia Pacific, Middle East, and North Africa) 16.4%, and Latin America 16.2%. Sales in North Asia witnessed a decrease of 1.1% compared to the previous quarter’s decline of 6.2%.
Additionally, the company has the advantage of adopting a multifaceted approach to beauty that includes Luxe, Consumer, Professional, and Dermatological segments. In Q1, Dermatological business showcased remarkable growth, achieving a like-for-like sales increase of 21.9% and a reported growth of 19.6%. This was followed by the Consumer Products (mass) segment, with a growth rate of 11.1% on a like-for-like basis.
This growth helped L’Oréal offset the weakness in its Luxe segment, which was mainly impacted by the slowdown in China and travel retail. Sales in this segment increased by a modest 1.8% like-for-like, and 2.2% on a reported basis.
Is L’Oréal a Buy or Sell?
In terms of share price growth, analysts have a moderately bullish outlook on L’Oréal stock, with no significant projected upside. Following the Q1 update, analysts from RBC Capital and Jefferies have reaffirmed their Sell ratings on the stock, forecasting further downside for the shares.
Overall, OR stock has received a Moderate Buy rating on TipRanks, backed by six Buys, two Holds, and three Sells. The L’Oréal share price forecast is €429.60, which is 1.4% above the current trading levels.
