L'Oreal's shares rose sharply on Wednesday after the cosmetics and fashion group reported higher third-quarter sales, with turnover driven by booming demand in Asia.
The group's shares were up 5.9% in early trading, one of the best performers in European markets. The stock has risen nearly 10% so far in 2018.
Late on Tuesday, L'Oreal posted revenue of €6.47 billion, up 6.2% from a year earlier and rising 7.5% on a like-for-like (LFL) basis, which strips out currency swings and the effect of acquisitions.
Strong Performance
"Outstanding Q3 LFL top-line growth was ahead of the elevated levels of H1 and consensus expectations," Bernstein analyst Andrew Wood said in a note.
"L'Oreal's stock has been lacklustre in recent weeks, giving up some year-to-date gains, as investors worried about slowing top-line momentum, but the strong Q3 should drive a good, positive stock reaction," he added.
A particularly strong performance in the luxury division, which houses Yves Saint Laurent make-up and perfumes and brands such as Clarisonic, also lifted L'Oreal's overall revenue.
Rivals more squarely focused on the luxury segment like U.S.-based Estee Lauder have also been performing well.
L'Oreal has been struggling, however, to counter the more sluggish growth in its consumer products division, with sales coming in a little below forecasts and matching the lacklustre 2.3% like-for-like growth of the second quarter.
Nevertheless, analysts gave a positive reaction with Investec upgrading its rating on L'Oreal to "buy" from "hold".
The Bettencourt Meyers family owns 33% of L'Oreal and Swiss company Nestle has a 23% stake.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
