Chinese slump takes shine off L’Oreal as sales in its north Asia division fall 6.5%

L’Oreal last night became the latest major western consumer brand to warn of weak demand in China.

The Paris-listed French beauty giant, which owns labels including Mugler and Lancome, saw global sales grow 3.4 per cent to £8.6billion for the three months to September 30.

But analysts had forecast a jump of 6 per cent. Sales had grown 5.3 per cent in the previous quarter.

L’Oreal was dragged down by a disappointing performance in its north Asia division, which is primarily China.

Sales in this region fell 6.5 per cent as the beauty market ‘continued to deteriorate, impacted by low consumer confidence,’ a L’Oreal spokesman said. 

Consumers in China – the world’s second largest economy and a crucial market for consumer goods groups – have reined in spending amid an economic slowdown and a property market crisis.

Shares L’Oreal have slumped around 17 per cent this year so far.

Chief executive Nicolas Hieronimus said: ‘The situation in [China] has become even more challenging, but we believe in the future of this market and hope that the governmental stimulus will help improve consumer confidence.’

China has pledged to kickstart its economy and last month its central bank launched its biggest stimulus package since the pandemic.

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