L’Oréal’s profits slump as its luxury business struggles
L’Oréal has reported an 8.3% drop in operating profit for the six months ended 30 June 2009. The company made an operating profit of approximately €1.4bn, as compared to €1.5bn in the first half of 2008. This was in spite of a 1.4% increase in sales, which reached nearly €8.8bn.
L’Oréal has reported an 8.3% drop in operating profit for the six months ended 30 June 2009. The company made an operating profit of approximately €1.4bn, as compared to €1.5bn in the first half of 2008. This was in spite of a 1.4% increase in sales, which reached nearly €8.8bn.
The C&T giant’s hardest hit division was luxury products, which dropped significantly from €354.1m in the same period last year to just €225.3m. However, the group’s active cosmetics division performed well accounting for 27.9% of all sales, while L’Oréal’s The Body Shop and Galderma were both profitable.
The company described its sales during the six months ended 30 June 2009 as “robust and encouraging”. Jean-Paul Agon, L’Oréal’s ceo, said that the results confirmed “the resilience of L’Oréal’s business model” and reflected “the first effects of the anti-crisis strategy adopted”. This strategy encompasses accessible innovation, the opening up of new categories, the acceleration of globalisation, sustained advertising and promotional investments, and reduced costs.