L’Oréal has reported a 6% like-for-like growth of sales of €32.4bn over the first nine months of 2024, despite facing several headwinds in the third quarter.
L’Oréal’s CEO Nicolas Hieronimus cited weaker demand in North Asia, where luxury sales have dipped 6.5% in Q3 and a slowdown in the US dermatological beauty sector as key challenges.
Hieronimus acknowledged on a call that the beauty industry, which saw accelerated growth during the Covid-19 recovery period, is now returning to pre-pandemic levels.
“Fast forwarding into 2025 we expect the global beauty market to continue to grow at pre-COVID levels,” said Hieronimus.
He added that while the company is confident in continuing to outperform the market, the focus moving forward will be on innovation and increasing demand across all divisions.
L’Oréal’s Dermatological division, which includes its popular CeraVe brand, saw a decreased growth, particularly in the US.
The French beauty giant tied this to a reduction of demand over the summer, with younger consumers, especially Gen Z, exploring alternative competitors.
Despite CeraVe holding a 19% share in the US market, Hieronimus admitted that recent performance was affected by a lack of innovation, something the company plans to address with upcoming product launches.
“The US market has seen a reduction, driven by a lack of recent innovation in CeraVe, but the appetite for dermatological beauty remains high.”
“We’re focused on bringing new products to market to excite consumers and drive growth once again.”
In particular, make-up and fragrance sales have remained steady, and new product launches in these areas are further expected to boost growth in the coming months.
Looking ahead, L’Oréal is said to be preparing a major push for 2025, increasing both the quality and volume of its product launches to stimulate growth as market conditions normalise.
The company has described this as a ‘beauty stimulus plan’ to maintain its competitive edge in what is now a more subdued market environment.
Hieronimus said: “We have asked all our teams to increase both the quality and quantity of launches for 2025 innovation is crucial to winning.”
He pointed to several ‘blockbuster’ launches across all categories, including hair care and fragrance, that will roll out in the coming months.
The holiday season is expected to be a key period, with strong sales anticipated in the fragrance category.
“In a context that continues to be marked by economic and geopolitical uncertainties, we remain confident to achieve another year of growth in sales and operating profit and are preparing our own beauty stimulus plan for 2025,” Hieronimus concluded.