May 6, 2009
L'Oreal says hit by drop in luxury product sales
May 6, 2009
PARIS, May 6 (Reuters) - French cosmetics giant L'Oreal (OREP.PA) on Wednesday 6 May posted a steeper-than-expected 4.3 percent drop in comparable first-quarter sales, battered by weak demand for hair products and upmarket creams.
The provider of Lancome, Biotherm and Vichy creams generated revenues of 4.37 billion euros ($5.82 billion) in the three months to March 31, against 4.359 billion euros in the year-ago period.
The performance came below expectations of a 3 percent drop in comparable first-quarter sales.
However, on a reported basis, the growth came at 0.3 percent and beat a mean forecast of 4.424 billion euros based on a poll of nine analysts compiled by Reuters Estimates. The Paris-based group, owner of hair brands Kerastase and Garnier, has seen trading weaken considerably in recent months, blighted by consumer insecurities and thriftiness.
But it said the cosmetics market was resisting the crisis well and it expected trading to improve over the course of the year.
During the first quarter, L'Oreal witnessed a severe drop in luxury product sales, down 17.5 percent on a like-for-like basis to 926 million euros.
"The first quarter of 2009 was sharply hit by distributor inventory reductions ... by a sharp fall in air traffic which affected travel retail, and by a very large drop in consumption in countries such as Russia and Dubai," it said in a statement. (Reporting by Astrid Wendlandt; Editing by Rupert Winchester)
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