A cosmetic display of French cosmetics group L’Oreal is seen at a duty free shop at the Nice International Airport, in Nice, France, October 10, 2018. REUTERS/Eric Gaillard/Files

PARIS (Reuters) – L’Oreal reported better-than-expected fourth quarter sales growth on Thursday, boosted by strong demand for its luxury skincare brands such as Lancome in Asia, and a slight improvement in its underperforming mass market division.

The French maker of Maybelline and Urban Decay make-up has thrived like rivals on strong demand from Chinese shoppers in recent years, especially for its higher-end products.

This boom has shown little sign of slowing yet, with U.S. peer Estee Lauder, more firmly focussed on the luxury end of the market, raising its annual profit forecast as a result earlier this week.

At L’Oreal, which is due to detail its results at a news conference on Friday, Asia Pacific overtook North America as its biggest region last year, and the company reported accelerating revenue growth there in the last three months of the year.

Overall sales at the firm grew by 7.7 percent in the fourth quarter on a like-for-like basis, which strips out currency effects and acquisitions – beating forecasts of 6.4 percent.

Revenue was up 8.6 percent on a reported basis at 7.1 billion euros ($8.1 billion).

Growth in L’Oreal’s consumer products division, its biggest source of revenue and home to brands such as Garnier shampoo, has lagged that of rivals such as Nivea-maker Beiersdorf and Dove soap owner Unilever in recent quarters.

But momentum picked up slightly in the last three months of 2018.

For 2018 as a whole, the company’s operating profit rose 5.3 percent to 4.7 billion euros, giving a margin of 18.3 percent of sales, up from 18 percent at the end of 2017.

Reporting by Sarah White and Pascale Denis; Editing by Mark Potter


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