L'Oreal revenues up, proving it's worth it

Luxury French cosmetics group L'Oreal posted higher revenues in the second quarter, helped by emerging markets and positive currency effects and confirming a recovery in consumer spending that started earlier this year.

Second-quarter revenues climbed 5.2 per cent to €4.95 billion (4.1bn) on a like-for-like basis, slightly ahead of analysts expectations of €4.897bn.

L'Oreal, which sells Garnier shampoo and Vichy facial creams, does not provide full-year forecasts. However, it has pledged to return to growth this year and said in a statement that "it can tackle the second half with confidence".

The group, which was severely hit by the spending slump last year, saw signs that shoppers were returning to stores in the first three months of the year and the trend was confirmed in the second quarter.

The firm said: "The strong first-half sales growth reflects a return to good like-for-like sales trend and a very positive exchange rate impact, which might increase in the course of this year."

Bright spots included 11 and 18 per cent jumps in like-for-like sales in Asia and Latin America. North American sales were also up 4.2 per cent to €1.12bn, outpacing slower 1.1 per cent growth in Europe.

Shares in L'Oreal closed down 0.85 per cent at €82.8 ahead of the company's results. L'Oreal is up 6.16 per cent in the year to date while France's CAC 40 index is down 9.7 per cent.