* Q4 sales rise 5.4 pct like-for-like to 5.76 bln euros
* Proposes 2.50 euro dividend, up 8.7 pct
(Adds analyst comment, details of luxury and consumer goods
By Astrid Wendlandt
PARIS, Feb 10 L'Oreal's underlying
sales growth improved more than expected in the fourth quarter,
helped by solid demand in the Americas and western Europe, and
strong growth in new markets in Africa and the Middle East.
The French maker of Garnier shampoo and Biotherm cream said
sales growth in the three months to Dec. 31 reached 5.4 percent,
beating analysts' forecasts of 4.5-5.0 percent and the 4.1
percent achieved in the previous quarter.
The upbeat trading update came after L'Oreal shares jumped
on Monday on speculation it could buy part of Nestle's
30 percent stake in the cosmetics group and cancel the stock,
thereby boosting earnings per share.
L'Oreal management is likely to face questions at its annual
results news conference on Tuesday about whether Nestle has
informed the French group of its intentions regarding the stake,
as reported by Bloomberg on Friday.
L'Oreal, which has declined to comment on the report, did
not give a precise forecast for the year but said it expected to
outperform the market, and post higher sales and profit.
"Western Europe remains very solid, North America recorded
another year of growth and market share gains in a less buoyant
market context," L'Oreal Chief Executive Jean-Paul Agon said in
The company also pointed to strong growth in Latin America,
Africa and the Middle East.
"The foreign exchange impact is less negative than expected
and the organic growth is better than expected," Deutsche Bank
analyst Harold Thompson said, adding it was a positive sign that
the group proposed to raise its payout by so much.
The group proposed a dividend of 2.5 euros ($3.41) a share
for 2013, up 8.7 percent, to be paid out of full-year earnings
per share of 5.13 euros, up from 4.91 euros in 2012.
Growth accelerated at the luxury division, which makes
Armani perfume and Lancome cream, reaching 8.4 percent in the
fourth quarter on a like-for-like basis, compared with 6.2
percent in the nine months through September.
Overall, L'Oreal's luxury division saw sales rise 6.8
percent in 2013, roughly in line with the perfume and cosmetics
division of industry giant LVMH, owner of the
Givenchy, Dior and Guerlain brands, whose sales rose 7 percent.
The group's consumer products division, its biggest in terms
of revenue, suffered a slowdown with growth at 3.7 percent in
the fourth quarter against 5.3 percent in the preceding
Overall, L'Oreal said its operating margin improved over the
course of last year to reach a record level of 16.9 percent,
against 16.7 percent as reported in its annual report for 2012.
($1 = 0.7327 euros)
(Editing by James Regan, editing by David Evans)