L'Oreal Expected to Report an Acceleration in Sales Growth Despite Challenging Beauty Backdrop -- Earnings Preview

Dow Jones10-20

By Andrea Figueras

L'Oreal is scheduled to report results for the third quarter on Tuesday. Here is what you need to know.

NET SALES FORECAST: The French beauty giant is expected to post quarterly net sales of 10.45 billion euros ($12.18 billion), according to a Visible-Alpha poll of estimates by 14 analysts. In the prior-year period, the company reported net sales of 10.28 billion euros.

The stock has moved up 5.9% over the past 12 months and is around 15% higher since the start of the year.

WHAT TO WATCH

-- Analysts at Barclays forecast an improvement in sales trends despite a challenging environment for beauty groups, which have been struggling with softer market conditions as well as economic and geopolitical tensions. The analysts anticipate a like-for-like sales increase of 4.4% in the third quarter, higher than the 2.4% rise in the prior three-month period. The improvement should be driven by an easier comparison base and a bigger impact from product launches, analysts at HSBC said in a note to clients.

-- Amid a wider downturn for the beauty sector, demand in China has been softer due to the country's macroeconomic woes and rising competition from local players. Deutsche Bank argues that a material improvement in this market will be crucial for the French group to deliver a continuing level of growth. L'Oreal is starting to see an improvement in the key Chinese market, with strengthened consumer sentiment, Jefferies analysts said in a research note.

-- Investors will also focus on potential deals after the company announced an agreement with Gucci-owner Kering to buy the luxury-group's beauty unit. While L'Oreal was named by the late Giorgio Armani as a potential suitor for the Armani brand, there is also scope for an agreement with Nestle to buy back the stake that the Swiss group holds in L'Oreal, Barclays analysts said in a note to clients. Capital allocation here will be watched closely as the beauty group looks to navigate an increasingly competitive landscape, Barclays added.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

October 20, 2025 11:33 ET (15:33 GMT)

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