L'Oreal's Economic Struggle: Growth Slows as China Rebounds

L'Oreal's Q3 growth underwhelmed due to weak North American performance, while China's luxury market saw improvement. Nicolas Hieronimus highlighted a 3% growth in China's beauty market. L'Oreal focuses on innovation to combat slowing sales and plans a $4.7 billion acquisition of Kering's beauty business.

French beauty giant L'Oreal experienced slower-than-expected growth in the third quarter, primarily due to underwhelming performance in North America. Chief Executive Nicolas Hieronimus pointed to a promising rise in demand within China's luxury market.

Hieronimus noted a 3% sales increase within the Chinese beauty market, its first growth in two years, spurred by a modest boost in consumer confidence. Despite this, overall sales growth has decelerated due to post-pandemic inflation and economic shifts in China that encouraged local brand preference.

In efforts to regain momentum, L'Oreal is investing heavily in innovation and acquisitions. A recent $4.7 billion deal will see the company acquire Kering's beauty business, enhancing its fragrance sector. Gucci, as part of this deal, could rival Yves Saint Laurent's significant sales figures.

(With inputs from agencies.)