French cosmetics group L’Oréal has had sales of 5.8 billion euro in the second quarter of 2013. That is 4.2% more than in the same period of 2012, but the result is far lower than the growth of 5.1% the company had in the first quarter. The rise in demand for cosmetics worldwide is clearly slowing down.
Demand in North America weakens
Especially in North America L’Oréal – the company of brands such as the shampoos of Garnier, the skin creams of Lancôme and the perfumes of Victor & Rolf –sales are losing momentum. At a comparable basis, sales growth was 4.5% in the second trimester.
In the first quarter that had been 6.3%. Of worldwide sales of 5.8 billion euro, 1.37 billion euro were made in North America.
The weakening in North America is a general problem, not only for L’Oréal. Last year the market in the US rose by 4.5%. In the first half of 2013 the rise was barely above 3%. This was something CEO Jean-Paul Agon had not expected given the current good performances of the American economy.
Growth countries most important for L’Oréal
In other regions things fared better for the company. On the new markets in Latin America, Asia and Africa, comparable sales of L’Oréal grew by 10.3% to 2.1 billion euro in the second quarter. This currently makes them the most important markets of the brand.
In Western Europe, the traditional home base for L’Oréal that was hit by an economic crisis, the rise in sales was limited to 1.7%. Total sales for the second quarter in that region came to 1.9 billion euro.
For the entire year L’Oréal is aiming at a global growth of 3.5% to 4%. Financial results will be announced by the end of August.