L’Oreal shares fell on Friday after the world’s biggest cosmetics group posted fourth-quarter sales and profit margins that were below expectations.
The French company disappointed investors with sales that were up 4.1 percent in the three months to the end of December.
L’Oreal’s results came after US rivals Estee Lauder and Elizabeth Arden raised full-year forecasts and topped profit expectations for last year. Their sales were boosted by overseas business, particularly in China and Russia.
L’Oreal’s chief executive Jean-Paul Agon has predicted the firm will beat global cosmetics market growth which is seen at three to four percent for 2011. “We expect to outperform the market again this year,” he said at a results presentation.
Agon, who is stepping up to executive chairman following the resignation of Lindsay Owen-Jones, said L’Oreal had made no decision on a share buyback and wanted to preserve cash for potential acquisitions.
“Our priority remains acquisitions, regarding our use of cash. No decision has been taken yet regarding share buybacks,” he said.