L'Oreal Q3 Sales Disappoint, Shares Drop

L'Oréal reported third-quarter sales of €10.28 billion, falling short of analysts' expectations of €10.57 billion, with like-for-like (LFL) sales growing by only 3.4% compared to a forecast of 5.88%. Notably, the North Asia region, heavily impacted by declining consumer confidence in China, experienced a 6.5% drop in LFL sales. While North America performed better with a 5.2% increase in LFL sales, the overall performance of the Derm.Beauty segment was particularly disappointing, achieving only a 0.8% growth versus an anticipated 11.2%. L'Oréal CEO Nicolas Hieronimus acknowledged the challenges in the Chinese market and expressed hope that governmental stimulus could improve consumer sentiment. Following the earnings report, L'Oréal's American Depositary Receipts fell by about 4% and have lost 20% of their value since June, reflecting broader concerns about consumption in China and its impact on the cosmetics market. The company's struggles align with similar reports from other luxury brands facing downturns due to weak demand in China.