Cosmetics lose their importance during lockdowns: L'Oréal's turnover went down more than expected, while profit dropped as well.
20 % turnover drop
In its past quarter, the French cosmetics group saw its turnover drop to 5.85 billion euros, an 18.8 % drop on a comparable base. Analysts had expected that drop to be 'only' 13.1 %.
Still, the owner of Maybelline and Lancôme succeeded in keeping the profit drop limited to just over 10 %, reaching 2.14 billion euros for the first half of 2020. L'Oréal was able to reduce costs, especially in advertising, so its operational margin only dropped from 18.6 % to 18 %.
Despite the fact that sales in tax-free shops, an important channel for L'Oréal, were almost completely erased, the company is more positive for the second half of the year: it hopes new releases can lead to renewed growth. China is leading the way: since the hardest measures were lifted, turnover went up by almost a third.