Beauty business update: LVMH; Unilever; L'Oréal; Beiersdorf; Coty; Inter Parfums
Beiersdorf
For the first quarter of 2024, Group sales rose to €2.6bn, up by 7.3% in organic terms.
Sales for the Nivea brand – including Labello – were up by 12.6% year-on-year in the first quarter, fueled by balanced pricing and volume growth.
The brand grew in all regions, with its most significant sales growth in Europe, up by 13% in organic terms, and the Emerging Markets, up by 14% in organic terms, which was led by the Sun, Deo and Face Care categories and the Luminous product range.
Beiersdorf’s derma brands Eucerin and Aquaphor saw sales up by 10.2%, driven by the Eucerin Sun business, particularly in Europe. Eucerin also entered the Face Care category in the US market.
After increasingly poor performances, La Prairie returned to growth in the first quarter of 2024 with an organic sales increase of 1%. The business said it expected further growth acceleration for the luxury brand in the second half of the year.
Vincent Warnery, CEO of Beiersdorf noted that Nivea had achieved its best quarter ever in terms of absolute value in Q1 and said that “the luxury business (La Prairie) is on its way toward the expected full turnaround after a challenging year 2023.”
LVMH
LVMH recorded overall revenue of €20.7bn in the first quarter of 2024, which was an increase of 3%. Although sales were still up, this was a poor performance in comparison with previous performances. For example, in its financial figures released in July 2023, sales were up by 15%.
However, its Perfumes & Cosmetics business group achieved organic revenue growth of 7%, driven by its powerful innovative momentum and selective distribution strategy.
The business highlighted strong performances from Christian Dior, with ongoing success of the Sauvage, J’adore and Miss Dior scents; the relaunch of Rouge Dior in makeup and the Capture skin care line.
Other high performing ranges were Guerlain’s Aqua Allegoria fragrances; Abeille Royale creams and Terracotta makeup. While Parfums Givenchy saw a boost thanks to the expansion of its L’Interdit fragrance and Maison Francis Kurkdjian delivered solid growth, driven by its iconic Baccarat Rouge 540.
LVMH’s global beauty retailer Sephora achieved strong growth and it continued to gain market share. The strongest markets were Europe, the Middle East and North America.
Coty
Coty’s sales for its third quarter (1st January – 31 March 2024) were up by 8% on a reported basis, with both the Prestige and Consumer divisions reported growth, while revenue increased across all regions and in each of its Core categories.
CEO Sue Nabi spoke about the company’s continuing success, stating: “Coty’s global and multi-category presence is proving to be a key area of strength and differentiation, as subdued trends in a very few markets and subcategories, such as US mass cosmetics, are more than offset by continued strong momentum in the majority of our core business areas, including global prestige and mass fragrances, where our business grew by a low-double-digit percentage, and prestige cosmetics, where our sales grew over 20 percent.”
Inter Parfums
French fragrance company Inter Parfums said its first-quarter net sales had reached $324m. This was up by 4% on the previous year, which had been a very successful year for the company – with 24% sales growth.
The business noted that its US-based operations saw an 18% increase in sales, driven by Donna Karan/DKNY and GUESS.
Its Roberto Cavalli fragrance and the expansion of European brand distributions contributed to this success.
Donna Karan’s new Cashmere Collection had also performed well.
Chairman & CEO Jean Madar referenced significant contributions from new Lacoste and Cavalli fragrance launches but highlighted that the current challenges in Eastern Europe and sluggish performances across some major brands have shaped the overall outcome.
Unilever
Volume sales were up for the British FMCG business in the first quarter of 2024, led by its Beauty & Wellbeing division and ‘Power Brands’ within this sector.
The Group turnover was €15bn, up 1.4% versus the prior year. Total underlying sales grew by 4.4%, and volume sales were up by 2.2%.
In its Beauty & Wellbeing division, underlying sales were up by 7.4%, and volumes grew by 5.6%, which it said was “driven by continued double-digit growth from Health & Wellbeing and Prestige Beauty.”
Meanwhile, the Personal Care division grew by 4.8%, with 1.4% from volume sales.
CEO Hein Schumacher noted that the improved volume growth in the first quarter that was driven by its Power Brands, such as Dove and Sunsilk.
The business’ Prestige Beauty division saw double-digit growth, which Unilever said was led by Tatcha, Hourglass and Living Proof.
Hair Care delivered mid-single digit growth and saw positive volumes and price.
Notably the Dove hair brand saw high-single digit growth, which Unilever said has been “supported by the launch of Scalp+ Hair Therapy, which is clinically proven to create optimal scalp health and hair density.”
While Clear, Sunsilk and TRESemmé brands all enjoyed a prosperous quarter.
Core Skin Care grew mid-single digit with the best performances in India and the US. However this was partially offset by declines in North Asia driven by price.
The Deodorants category grew in double digits with high-single digit volume sales growth, but Skin Cleansing sales were flat, which the business said had been “impacted by deflation in India and market challenges in Indonesia.”
Meanwhile, the Oral Care division continued to grow mid-single digit with positive volume and price.
L'Oreal Group
For the first quarter of 2024, the French multi-national reached sales of €11.24bn, up by 9.4% on a like-for-like basis compared to the same period the previous year, with growth seen in both volumes and values.
The business said that all divisions grew, but Dermatological Beauty saw the most noteworthy boost, with sales up by 21% in comparison to the previous year.
Regionally, Europe and Emerging Markets (mainly Brazil, Mexico and Indonesia) enjoyed the strongest results, while North Asia saw sales figures drop.
CEO Nicolas Hieronimus believed that 2024 was off to a good start for the business and noted that the beauty industry “has once again proven its relentless growth capacity.”
Hieronimus also noted that strong growth in Europe and the emerging markets had “more than offset the gradual recovery in North Asia,” while the strong performances of dermatology-based and mass-market beauty brands had “compensated the short-term challenges in luxury.”
L'Oreal’s Dermatological Beauty division reported sales growth of 21.9% on a like-for-like basis.
The business claimed that this sector was “advancing 1.6 times faster than its dynamic market” and that momentum was balanced between developed and emerging markets, as it pursued global expansion.
In terms of brands in this division, La Roche-Posay was still its top growth contributor, with CeraVe close behind.
Globally, for mass-market products, Europe and Emerging Markets saw the best performances for this division. Category-wise, L’Oréal said Colour Cosmetics grew significantly in this quarter; Skin Care “significantly accelerated”; and Hair Care was its fastest-growing category.
Meanwhile L’Oréal’s prestige division, L’Oréal Luxe saw slight growth – by 1.8% on a like-for-like basis – but this was weak in comparison to other divisions.
The business said it believed that this division had been “penalised by an unfavourable comparison base in Travel Retail and sluggish market growth” in the North Asia region.
