L'Oreal's growth is picking up pace.
On October 22, L'Oreal released its sales results for the first three quarters of 2026. Third-quarter sales reached 11.561 billion euros, up 11.9% year on year and beating the market estimate of 11.23 billion euros. After stripping out the effects of currency fluctuations, changes in scope of consolidation and the timing of an IT system switch, adjusted comparable growth was 7.7%.
The market had already been anticipating a recovery. In a research note dated October 12, UBS described the third quarter as a key test of whether L'Oreal could sustain growth of about 6%. The actual result came in above that level, lending more support to the view that growth is recovering.
Luxury cosmetics were an important source of the beat. The division posted adjusted comparable growth of 7% in the third quarter, above the market estimate of 4.5%. Reuters noted that demand for fragrances and improving sales in China together drove the growth.
This means L'Oreal is gaining more growth drivers beyond fragrance. For some time, the company has stepped up skincare innovation in an effort to revive this important category. The performance of brands such as Helena Rubinstein, SkinCeuticals and La Roche-Posay has gradually translated improving demand for premium and efficacy skincare into sales.
Reuters, citing management, said Helena Rubinstein achieved high double-digit growth, while SkinCeuticals and La Roche-Posay also maintained double-digit growth.
China is an important market for observing this shift. In the third quarter, L'Oreal's North Asia sales were 2.229 billion euros, with comparable growth of 7.8%. The company said the Chinese market remains mainly driven by premium beauty, with L'Oreal growing at nearly three times the pace of the local market and posting growth both online and offline. North Asia travel retail also returned to positive growth in the third quarter.
However, this improvement cannot yet be equated with a full recovery across the entire beauty market.
L'Oreal CEO Nicolas Hieronimus said at the earnings call that China's beauty market is growing again after two years of contraction, but the third quarter was affected by a higher comparison base, causing growth to slow slightly from earlier levels. Middle-class consumers are shifting some spending from entry-level luxury goods to premium beauty, offering opportunities for the company.
L'Oreal is not relying solely on a China recovery. Europe posted adjusted comparable growth of 8.9% in the third quarter, while South Asia-Pacific, the Middle East, North Africa and sub-Saharan Africa grew 19.5%, with strong demand in Gulf countries and Vietnam. Growth across multiple markets has reduced the group's dependence on any single region.
Differences between businesses remain pronounced. Professional hair care and dermatological beauty both posted adjusted comparable growth of 13.9% in the third quarter, while mass cosmetics came in at 3.8%, below the 4.6% of the second quarter. Premium hair care and efficacy skincare remain stronger, while the mass business, which covers a broader range of consumers, has yet to accelerate in tandem.
Latin America, meanwhile, exposed operational weaknesses. Adjusted comparable sales in the region fell 3% in the third quarter, with Mexico's mass cosmetics business hit by commercial execution issues, a temporary disruption in the makeup supply chain and retailer inventory adjustments.
Hieronimus still expects L'Oreal's full-year sales and profit to continue growing.
For L'Oreal, the recovery in premium beauty has already delivered a revenue surprise. Whether the mass business can keep up will determine the sustainability of this recovery.
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