L’Oréal posted a strong third quarter, with adjusted like-for-like sales growth of 7.7%, ahead of the global beauty market's roughly 5% growth and an acceleration from 6.5% in the first half. Shares traded nearly 6% higher on Oct. 23.
With its unmatched scale, L’Oréal outspends peers on marketing and R&D, which keeps brands visible and innovation ahead of smaller rivals.
Bears
Mass-market beauty has seen intensifying competition over the last decade, with a plethora of indie brands capturing consumer spending. This could dent L’Oréal’s competitive position over time.
L’Oréal is the largest beauty and personal care company globally, generating annual sales of around EUR 44 billion. It has global market share of around 12%, more than twice that of its closest competitor. It competes in essentially every beauty subcategory through four divisions: consumer products, luxe, dermatological beauty, and professional products. Its portfolio is led by L’Oréal Paris, the world’s largest brand in beauty and personal care, alongside about 40 other leading brands. Europe and North America generate more than half of sales. Emerging markets account for less than 20% because L’Oréal classifies North Asia as a developed market, given the maturity of its beauty industry.