L'Oréal posted first-half organic sales growth of 6.5%, CEO Christophe Leblanc told attendees at Barclays' 19th Annual Global Consumer Conference on Tuesday, significantly outpacing what he estimated was a market growing around 4.5%.
Operating margin expanded by 20 basis points. Advertising and promotional spending rose 70 basis points year-over-year, adding EUR 700 million, while selling, general and administrative expenses fell to 18% of sales from 18.7%, with the company setting a long-term goal of moving toward 15% over three to five years. Gross profit margin held at 74%. R&D spending was maintained at approximately 3% of sales.
L'Oréal’s dividend yield stands at 1.4%, with payments sustained for 35 consecutive years. The company noted that over the past 35 years, only 2020 recorded negative beauty-market growth.
Performance varied materially across categories. Haircare rose 15.6%, led by Kérastase, which posted growth in the high 20s. Fragrance grew above 10%, roughly double the market rate. Makeup advanced only 2.5%, lagging the broader market — Leblanc acknowledged the cyclical nature of the segment, noting that digital-driven shifts in fashion and color trends make it especially volatile.
Regionally, emerging markets grew about 10%, while developed markets posted mid- to high-single-digit gains. Europe accelerated to 7%–8% in the latest quarter, with e-commerce growing roughly 20%. China, representing about 17% of total sales, saw its luxury segment grow 10%; e-commerce penetration reached approximately 65% of total China sales, and Douyin growth hit 55% during the June 618 shopping period. Southeast Asia e-commerce grew 40%. The U.S., accounting for roughly a quarter of business, delivered mid-single-digit growth, driven heavily by American-owned brands.
On acquisitions, L'Oréal highlighted that CeraVe has scaled tenfold since acquisition, while the Valentino and Prada fragrance portfolios each scaled seven times. The company increased its Galderma stake from 10% to 20%, with two L'Oréal executives joining the dermatological skincare firm's board in May 2024. The Gucci Beauty acquisition, closed in June 2024, is on track to launch its first products in approximately 18 months.
Leblanc said the company is exploring AI applications to accelerate formula development, which could become two to five times faster. He also emphasized that any future acquisition must be accretive on both sales and profit and fit within L'Oréal’s integration playbook.
