L'Oréal claims confidence despite poor Q1
L'Oréal's sales in North America dropped 4% in first quarter 2008, discounting exchange rate factors as the American slowdown affected the group's business. Jean-Paul Agon, director general, said they had anticipated a poor first quarter but the outcome had in fact been more difficult than expected. He attributed the downturn to reduced visits by customers to major stores and a larger than expected reduction of stocks by distributors.
L'Oréal's sales in North America dropped 4% in first quarter 2008, discounting exchange rate factors as the American slowdown affected the group's business. Jean-Paul Agon, director general, said they had anticipated a poor first quarter but the outcome had in fact been more difficult than expected. He attributed the downturn to reduced visits by customers to major stores and a larger than expected reduction of stocks by distributors.
Growth in Western Europe in contrast was positive with sales rising by 2.3% while business in Japan grew by 3.7%. Sales in Asia and Eastern Europe together went up by over 20%. Total sales in the reporting quarter increased by 5.1% to €4.4bn in terms of stable exchange rates. However, if currency factors are taken into account, the rise in sales was about 2.1%.
L'Oréal has said it is maintaining its growth forecasts for 2008 of between 6% and 8% despite the poor performance in North America. Agon said that the remaining quarters in North America would be "significantly better and in all cases positive". The North American cosmetics market currently accounts for over 20% of group sales.