* Luxury helps sales rise 13% in Q3
* Q3 sales beat analysts' forecasts
* Double-digit growth in China
PARIS, Oct 21 (Reuters) - L'Oreal on Thursday
posted better-than-expected revenue growth for the
third-quarter, fueled by continued strong demand for its luxury
lines and sustained growth in China.
The French group, which owns brands like Lancome and makes
Armani cosmetics, saw luxury sales surge over 20%, as it
benefited from e-commerce channels it expanded during the
pandemic and stores that reopened.
Though mainland China continued to post double-digit growth
during the quarter, helped by strong demand for hair and
skincare products, growth was tempered by a resurgence of some
regional coronavirus curbs.
Chief Executive Nicolas Hieronimus said the restrictions had
mostly impacted in-store sales and that the country's e-commerce
business continued to flourish.
"China's population and its middle classes are increasing
and their appetite for beauty is not satisfied," Hieronimus told
analysts in a call.
China last year became the world's second-largest market for
beauty and personal care products after the United States,
according to market research firm Statista, as a growing middle
class and social media influence boosted demand for premium
Calls from the Chinese government for a "common prosperity"
- a broad policy drive to narrow the gap between rich and poor
- have however stoked investor concerns the state could seek to
restrict high-end purchases.
But Hieronimus said that efforts to redistribute wealth
would likely increase the middle classes and benefit L'Oreal's
He said that premium lines were L'Oreal's fastest growing
categories in China, citing cosmetics brands Lancome Absolue and
The company reported sales up 13.1% from July to September,
excluding currency swings and acquisitions, materially beating
Consensus estimates cited by Deutsche Bank had predicted
growth at around 8%, fearing that demand would taper off
following a post-lockdown boom.
Sales had surged 33.5% in the previous three months, when
L'Oreal and fashion labels benefited from booming Chinese and
U.S. demand amid easing coronavirus curbs.
(Reporting by Mimosa Spencer and Sarah Morland; Editing by
Elaine Hardcastle, Jonathan Oatis and Nick Zieminski)