L'Oreal Rallies As Sales Increase Offsets China Concerns
L'Oreal's shares rose on Friday after fourth-quarter earnings from the French cosmetics company helped to offset concerns over the impact of China's coronavirus health crisis on its business.
The company's shares were up around 3.4% in early trading on Friday after L'Oreal reported late on Thursday that fourth-quarter revenue had risen 11.4% to €7.9 billion ($8.7 billion).
The maker of Maybelline cosmetics said China's coronavirus crisis would have only a short-term hit on the company's Asian business, which is its biggest sales driver.
"Solid finish to very strong year," wrote brokerage Jefferies, which rates L'Oreal shares as a "hold".
Robust demand from Chinese consumers for luxury creams such as L'Oreal's Lancome range has fuelled the company's sales growth.
L'Oreal's rival Estee Lauder has also benefited from this trend and performed strongly in the last three months of 2019, although the Clinique-owner trimmed its profit forecast for 2020 on Thursday, citing the virus impact.
China has now reported more than 600 deaths and 30,000 cases of the coronavirus.