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Luxury cosmetics help sales pick-up at L'Oreal

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Luxury cosmetics help sales pick-up at L'Oreal

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PARIS (Reuters) – L’Oreal <OREP.PA>, the world’s biggest cosmetics company, on Thursday posted slightly higher-than-expected sales in the third quarter as luxury brands such as Lancome and a surge in demand in China drove growth. Like-for-like sales, which strip out currency swings and acquisitions or disposals, rose 5.1 percent from a year earlier between July and September – a pick-up from the previous quarter and more than forecast by analysts. Sales in L’Oreal’s luxury division, which also includes Kiehl’s and Yves Saint Laurent beauty products, rose by 11.2 percent on a comparable basis, after expanding by 8.9 percent three months earlier. Revenue growth in Asia Pacific also accelerated from one quarter to the next, and the company said Chinese demand was particularly strong. “These good performances strengthen our confidence in our ability to once again outperform the cosmetics market in 2017, and to achieve growth in both our sales and profits,” Chairman and Chief Executive Jean-Paul Agon said in a statement. However, in the consumer products unit – which includes Essie nail varnish, Maybelline make-up and Garnier shampoo and is the biggest contributor to revenue – comparable sales were a touch below forecasts. They rose 2.3 percent, a small slowdown from the 2.4 percent pace notched up three months earlier. Agon said the U.S. and French markets were proving tough. Fellow consumer goods firms have reported mixed results, with Unilever <ULVR.L>, maker of Dove soap, coming below expectations in the third quarter while Beiersdorf <BEIG.DE>, owner of Nivea body milk, was more upbeat. Cosmetics giant Estee Lauder <EL.N>, meanwhile, is also riding high on strong Asian and European sales. L’Oreal’s revenue came in at 6.1 billion euros (5.44 billion pounds) across the group in the three months to end-September, versus the 6.08 billion euros expected in a poll of analysts carried out by Inquiry Financial for Reuters.

(Reporting by Sarah White and Pascale Denis; Editing by Edmund Blair)
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