French cosmetics giant L'Oreal SA (LRLCY.PK), Thursday said its first-quarter sales grew 9.4 percent, mainly on a strong demand for its products in emerging markets, especially Asia Pacific, combined with "remarkable" sales growth for luxury products.
Chief Executive Jean-Paul Agon said, "These first months augur well for the year, as all divisions and all geographic zones are expanding. The worldwide cosmetics market remains strong, and trends are favorable for all brands."
Sales from new markets, which includes Asia Pacific, Eastern Europe, Latin America, and Africa and Middle East, improved 14.1 percent. This growth was bolstered especially by Asia Pacific, where sales surged 22.6 percent.
On the European market Agon said "In Western Europe, in a sluggish market context, the group is growing and improving its positions. Finally, the new initiatives in Eastern Europe are beginning to pay off."
Sales increased 2.3 percent to 1.95 billion euros in Western Europe, while Eastern Europe sales grew 1.5 percent to 360.0 million euros.
North American market also showed signs of recovery with sales advancing 13.1 percent to 1.26 billion euros.
L'Oreal said sales for the first-quarter grew 9.4 percent to 5.64 billion euros from 5.16 billion euros last year. On a like-for-like basis, sales increased 6.4 percent.
The consumer products division sales grew 7.2 percent to 2.77 billion euros, while L'Oreal Luxe business posted an impressive 17.8 percent sales growth.
"L'Oreal Luxe is achieving remarkable growth, bolstered in particular by the dynamism of Lancome, the success of the designer fragrances, and the vitality of Kiehl's," Agon said.
Moving ahead, based on the strong first-quarter results, L'Oreal expressed confidence it would outperform the market in 2012 and achieve growth in both sales and profits.
LRLCY.PK is trading at $24.50, up 3.42%.
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by RTT Staff Writer
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