Business Maverick

L’Oreal Sales Slump as Makeup Becomes Pointless During Lockdowns

By Bloomberg 30 July 2020
Caption
Bottles of NYX 'Can't Stop Won't Stop' skin foundation, manufactured by L'Oreal SA, sit on display at the company's French headquarters in the Levallois-Perret district of Paris, France, on Thursday, March 12, 2020. E-commerce accounts for about 60% of L'Oreal's beauty sales in China vs. about 35% for peers, supporting good growth in February despite the coronavirus outbreak, based on the recent Consumer Analyst Group of New York (CAGNY) update. Photographer: Laura Stevens/Bloomberg

L’Oreal SA suffered as locked-down populations worldwide spent less on pricey perfumes and makeup.

L’Oreal’s in the three months through June dropped 19% on a comparable basis, the French cosmetics company said in a statement Thursday. Analysts had expected a 14% decline.

Users of makeup and perfume were less inclined to spend money on brands such as Maybelline New York since there were fewer occasions for social interaction during lockdowns. L’Oreal’s professional division also took a hit from the shutdown of hairdressers.

“We approach this second half with lucidity, confidence and resolve – lucidity because the global health crisis is unfortunately not over,” Chief Executive Officer Jean-Paul Agon said in the statement, predicting that “e-commerce will continue to get stronger.”

Separately, Agon told Le Figaro in an interview that he expects the second half of the year to be “much better” than the first, predicting “slight growth” in sales.

L’Oreal’s skincare products continued to perform well in the second quarter, with a 4.3% growth rate in its active cosmetics division. This unit, which sells dermatological brands such as La Roche-Posay, benefited from the fact that pharmacies and drugstores, considered essential during the pandemic, remained open to shoppers.

Online sales for the cosmetic giant’s products grew 65% in the first half, in a further sign the pandemic is accelerating a digital shift among retailers worldwide.

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