Temporary store closures and depressed demand during lockdowns to fight the coronavirus pandemic resulted in a sharper-than-expected 18.8% fall in second-quarter comparable sales, the owner of the Maybelline and Lancome brands said.
A recovery in China, L'Oreal's biggest market, and booming online sales of skincare products and hair tints across other markets, which have continued to thrive even as retailers re-open, would help earnings improve, the company said.
L'Oreal shares were up 1.3% at 0837 GMT after falling in early trading.
"The world will likely not experience lockdowns in a similar way to the first half, stores will likely remain open," Agon told a conference call with analysts.
L'Oreal was hit as department stores shut their doors temporarily and airport duty free shopping dropped off a cliff during the height of coronavirus lockdowns.
Make-up sales were hit particularly hard as consumers stayed at home, but shoppers still bought some cosmetics online and stocked up on other products. L'Oreal's e-commerce revenues accounted for a quarter of all sales, up from just under 16% at the end of 2019.
Agon said L'Oreal had trimmed costs by freezing staff headcount and clamping down on travel, and had cut out some expenses in stores. These included make-up testing displays, which consumers were not using during the crisis.
The company still planned to invest in marketing campaigns, however, including online, to promote new product launches in the second half, Agon said.
(Reporting by Sarah White; Editing by Edmund Blair and Susan Fenton)