The world's largest cosmetics company felt the effects of the US downturn as like-for-like sales in North America fell 3.9 per cent. L'Oreal's poor performance on the other side of the Atlantic held back the group's overall sales which grew 2.1 per cent to €4.359bn for the quarter. Commenting on the sales in North America, L'Oreal CEO Jean-Paul Agon said: "We had been anticipating a lacklustre 1st quarter; in fact, it turned out to be more difficult because of lower footfall in department stores and larger than expected inventory reductions by our distributors." Industry implications In the trading day after the announcement of the sales figures shares in L'Oreal fell by over 7 per cent but concern extended beyond the company. After the results were released a Deutsche Bank analyst downgraded shares in Procter & Gamble (P&G) from "buy" to "hold" citing worries about an industry-wide slowdown, according to Associated Press. The strength of the Euro against the Dollar is exacerbating worries among European manufacturers with a significant presence in the US. Impact of weak dollar Looking at the L'Oreal figures, currency fluctuations had a major impact as reported turnover for the quarter rose 2.1 per cent while like-for-like sales increased by 5.1 per cent. Meanwhile reported sales in Western Europe were unexceptional increasing 1 per cent compared to the same period last year. Despite these weak figures, L'Oreal continued to perform strongly in emerging markets with "rest of the world" sales up 12.1 per cent on a reported basis. L'Oreal also expects an upturn in its fortunes over the course of the year. "We are confident in our ability to accelerate our growth over the coming quarters thanks to favourable launch phasing, better prospects in North America and continued dynamism in other zones," said Agon.