L’Oréal has reported a sales boost in Q1 2025 despite a lagging performance in the US.
Fragrance and hair care, led primarily by the French beauty giant’s luxury division L’Oréal Luxe, drove a 4.4% sales increase to €11.73bn.
The “fast-growing” categories helped to offset a 3.8% sales slump in North America, which L'Oréal CEO Nicolas Hieronimus attributed to recent US tariff hikes.
US President Donald Trump’s so-called ‘Liberation Day’ taxes came into effect in April, imposing a 10% tariff on all countries.
Certain countries, such as China and South Korea, have been hit with higher levies, which resulted in an escalating trade war.
A 90-day pause on taxes on certain goods has since been announced by Trump, but global market uncertainty remains high.
“In what has been a particularly challenging and volatile operating environment, L’Oréal has started the year with growth in line with our projections,” said Hieronimus.
“In the current context, our priorities are to drive growth and manage our P&L [profit and loss] to offset the impact of tariff hikes – with the benefit of an already very healthy gross margin.”
YSL fragrances drove sales
The US has also been contending with an increasingly softening market in Q1, which impacted L’Oréal’s Dermatological Beauty division in the country.
Sales were shored up slightly by fragrance, as demand for Valentino's Born in Roma and YSL’s Libre and Myslf perfumes grew during the quarter.
CeraVe’s entry into hair care was also hailed by the beauty giant as having a “promising start” in the US that marked “new growth opportunities” for the brand.
China was hailed by L’Oréal for its performance during the quarter, in what feels like a profound turn of events for the turbulent beauty space.
While sales growth remained largely flat in the first quarter, the brand owner said it indicated recovery for the challenging market segment.
The country’s “surprise” growth supported an overall sales boom in North Asia, with sales increasing 6.9% on a like-for-like basis and 8.4% reported.
An increase in Japanese tourist activity, along with a solid quarter in Korea, also bolstered North Asia’s performance.
Growth was led by Dermatological Beauty, as well as Professional, through increased sales of hair care brand Kérastase products.
Travel retail in North Asia fared worse, however, as sales continued to decline in Q1.
“There were some good and some less good surprises: the US were more challenging than anticipated, while China was slightly better than expected,” added Hieronimus.
CeraVe's recent hair care entry has been praised in the US
European sales jumped 4.3% amid sustained growth of men's fragrances and make-up launches, including YSL’s Make Me Blush and Lancôme’s Lash Idôle Flutter mascara.
Although Dermatological Beauty faced a particularly high comparison base, La Roche Posay was praised as a “key growth contributor”.
“Europe was, once again, our single largest growth contributor, and emerging markets remained dynamic,” said Hieronimus.
L’Oréal’s Consumer Products and Professional Products divisions grew 2.3% and 1.6% respectively.
“We will, of course, continue to put the right fuel behind our 37 international brands to further reinforce our global leadership,” said Hieronimus.
“Consequently, I am confident that we will continue to outperform the global beauty market – which we expect to grow even amidst the current economic and geopolitical tensions – and to achieve another year of growth in sales and profit.
“We expect growth to accelerate progressively.”
L’Oréal’s positive growth in North Asia follows the announcement of its aims to grow 5% in China in 2025.
The optimistic outlook followed “encouraging signs” so far this year in China, according to L'Oréal’s North Asia and China CEO Vincent Boinay.
“The numbers are getting better and the target of 5% is not only the target for Chinese growth this year, but also the target of L'Oréal in China, by the way," said Boinay during a conference in Shanghai on 1 April.
China has proven to be a sticking point for a number of luxury beauty businesses in recent years amid the country’s continued struggles to recover from the Covid-19 pandemic.
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