French cosmetics group L'Oreal said Monday it managed to record a 2.0 percent gain in third quarter sales despite a soft performance in Western Europe and a drop in the mass market segment.
Group sales hit 5.39 billion euros ($6.73 billion) and the company confirmed its forecast to beat the average sales growth for the cosmetics industry, as well as to improve its operating profitability and profit per share
"In the third quarter, L'Oreal recorded low growth because of a slight contraction in the Consumer Products Division, as the mass market hit an air pocket in Western Europe," chief executive Jean-Paul Agon said in a statement.
The consumer products division saw sales slide 0.9 percent to 2.58 billion euros.
On a comparable basis, however, the 2.3 percent sales growth was the slowest this year after the 3.5 percent gain in the first quarter and 4.1 percent increase in the second.
He noted, however, there has been in the past couple of months an improvement in numerous areas including the mass market segment in the United States as well as exchange rate effects.
Nevertheless, in the third quarter currency effects had a negative 3.8 percent effect on sales
Despite the third quarter sales increase, nine-months sales were still down 0.4 percent to 16.57 billion euros on a reported basis.
Agon held out hope for a strong finish to the year, telling AFP that in the fourth quarter "growth should be the best in two years" thanks to a resumption of organic growth plus positive currency effects.
He held to his September forecast of a 3.0 to 3.5 percent increase in the global cosmetics market and said that L'Oreal would come in slightly above that.
He said the slide in the value of the euro in recent weeks was "the cherry on the cake" and that the $1.24 level hit Monday would provide a gain of 2 to 3 percent.