Shares in L'Oreal rose 4% on Friday, hitting their highest in more than two years, after the French cosmetics giant reported third-quarter sales well ahead of expectations on strong demand for premium products in China and elsewhere.
Sales from July to September rose 7.7% on an adjusted like-for-like basis to €11.56 billion ($12.95 billion), topping a consensus analyst forecast of 5.9% growth in a Visible Alpha poll, L'Oreal said late on Thursday.
The maker of Lancome creams and Prada perfumes beat estimates for growth in all regions apart from Latin America, with North Asia, which is predominantly China, significantly ahead. All of its divisions apart from its mass market unit exceeded expectations.
"L'Oreal, once again, beat a high bar," Barclays analysts said in a note.
Analysts at Jefferies called the report "an impressively strong update", highlighting a "momentum shift in China and Europe" that lifted the growth rate in its Luxe division.
The group generates a third of its revenue from its luxury division, but in China that business accounts for about two thirds of its sales in the market, positioning it well for a pick-up in Chinese demand. L'Oreal says it is growing three times faster than the market in China.
Shares were up 4.4% at €431.2 ($482.60) by 0917 GMT, the highest since June 2024. The shares are up by more than 17% this year.
"We see scope for the shares to test €450 as investors increasingly recognize the durability of its superior growth profile," the Barclays analysts added.
