L’Oréal shares fell sharply on the Paris stock market Friday after the cosmetics giant reported fourth-quarter sales that missed analyst forecasts, raising concerns about demand for its luxury products and in the crucial Chinese market.
The world’s largest beauty company posted quarterly revenues of 11.2 billion euros ($13.3 billion), a 1.5 percent increase on a reported basis. However, this growth rate was a significant slowdown from the 4.5 percent recorded in the same period a year earlier and fell short of consensus expectations. On a like-for-like basis, which excludes currency fluctuations, sales rose six percent, compared to a forecast of around eight percent.
The performance was mixed across regions. While Europe, L’Oréal’s biggest market, saw a seven percent rise, growth in North America stalled at 0.7 percent. More worryingly, sales in North Asia—which includes China—declined by five percent. The luxury division, L’Oréal’s largest by revenue and home to high-end brands like Lancôme and Yves Saint Laurent Beauté, reported a 0.5 percent sales slide to 4.2 billion euros.
“We think the miss, led by North Asia and Luxe, will be a concern amid a vague outlook,” said David Hayes, an analyst at Jefferies. The stock initially dropped over six percent, recovering somewhat to a 3.2 percent loss by midday.
For the full year, net profit decreased by 4.4 percent to 6.1 billion euros. Chief executive Nicolas Hieronimus described the 2025 performance as “solid” given a “volatile and unfavourable” context but urged “caution and humility” for 2026. He expressed hope that “the beauty market will continue its acceleration” barring “a new surprise,” adding the company must “intensify our efforts in terms of innovation to energise the market and win over customers.”
The results spotlight persistent challenges in key growth engines. The luxury sector faces a high-end spending slowdown, while the Chinese market remains critical yet volatile for global luxury and beauty conglomerates. L’Oréal’s cautious outlook underscores the pressure to reignite growth through innovation and marketing as consumer sentiment shifts in major Western and Asian markets.
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