L’Oreal shares rise amid strong earnings, upbeat China performance

L'Oreal shares are higher Wednesday, after the French cosmetics company reported a strong third-quarter performance, boosted by upbeat demand in China.

L’Oreal shares rise amid strong earnings, upbeat China performance

L’Oreal shares are higher Wednesday, following a strong third-quarter performance by the French cosmetics company. In particular, upbeat growth in China, combined with a positive outlook for the key region worked to boost demand for the stock.

By 1200 BST, L’Oréal shares were 6.63% higher at €198.75. The stock has been trending lower in recent weeks.

L’Oreal Q3 earnings

Earlier Wednesday, L’Oreal published its third quarter earnings results. The French-based firm, which owns brands including Lancôme, Yves Saint Laurent make-up and Armani perfumes, said total revenues climbed 6.2% to €6.47 billion in the third quarter of 2018, from a year earlier.

That was the best quarterly sales growth for the company in 10 years and helped support a strong performance across the first nine months of the year.

“After an acceleration in the third quarter, with the highest quarterly growth rate for 10 years, L'Oréal's sales have shown strong growth over the first nine months of the year,” said L’Oréal’s chairman and CEO, Jean-Paul Agon.

And, while fears remain that demand for luxury goods in China could slow, due to the ongoing trade dispute between the White House and Beijing, L’Oréal’s figures showed that’s not the case so far.

Positive outlook

Looking ahead, Agon told CNBC that right now, “In terms of consumption, at least in our categories ... we don't see any slowdown in the country…. What we see is a great appetite of Chinese consumers. There is also more and more income that has to be spent.”

Agon added that not only is demand from Asian and Chinese consumers for its luxury brands still strong, L’Oréal is still growing market share.

“Sales in China are flying, especially in luxury, and we have seen this now for a long time, and it's going on,” Agon said.

The CEO’s overall outlook was upbeat, too.

“Overall, L'Oréal's good performance during the quarter and in the first nine months reinforces our confidence in the dynamism of the cosmetics market and in our ability to outperform it, in order to achieve significant like-for-like sales growth this year, together with an increase in our profitability,” Agon said in the earnings press release.

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