* L'Oreal Q1 sales 5.5 pct vs expectations of 5.2 pct
* Luxury products sales up 7.2 pct vs forecast 5.2 pct
* For 2013, aims to beat market, grow sales and profits
(Adds details, analyst comment)
PARIS, April 18 L'Oreal reported first
quarter sales on Thursday slightly ahead of forecasts, driven by
strong demand in North America and new markets.
The world's biggest cosmetics group said trading in Western
Europe for luxury products remained lacklustre and trends were
negative for its professional hair products in southern Europe.
But demand for its luxury products such as Armani and
Lancome perfumes remained solid in North America, China and the
Gulf states and trading at its mass market products division
enjoyed "new dynamism" in Brazil and Russia.
The maker of Garnier shampoo and Yves Saint Laurent perfume
generated revenue of 5.93 billion euros ($7.76 billion) in the
three months to March 31, up 5.5 percent on a like-for-like
basis, above analysts' expectations of 5.2 percent sales growth.
"The first thing that struck us was that, even though its
growth remained below double-digits, new markets saw its best
growth in a year and second best growth in two years, which
contrasts to Nestlé's reporting from earlier today where we saw
its worst emerging market growth in 4 years," Bernstein said in
Nestle on Thursday reported slowing growth from
its emerging markets after some retailers in Asia cut
inventories and the destruction of a key Middle East factory in
Syria slowed supplies.
ON TRACK TO MEET GOALS
For 2013, L'Oreal reiterated its target to outperform the
market and increase both sales and profits.
L'Oreal's luxury division reported like-for-like sales up
7.2 percent in the first quarter, while analysts expected 5.2
Its professional products suffered flat growth during the
period and dropped 0.4 percent on a reported basis while
analysts expected like-for-like growth of nearly 3 percent.
Sales generated by the group's mass market consumer product
division, its biggest in terms of revenue, rose 6.5 percent on a
like-for-like basis, beating expectations of 5.7 percent.
L'Oreal Chief Executive Jean-Paul Agon said that the global
cosmetics market had slowed down during the first quarter,
generating an estimated growth of 3.5-4 percent against a 4.6
percent rise in 2012.
Looking at 2013, Agon said he expected the global market
growth "to be more around 4 percent than 4.5 percent."
Agon said Eastern Europe was recovering, particularly in
Russia, where it saw sales growth of 15 percent in the first
"We are confident that Eastern Europe is back to sustainable
growth," Agon said in a conference call with analysts.
Mass market and luxury products sales in North America rose
8 percent during the period, Agon said.
($1 = 0.7644 euros)
(Reporting by Astrid Wendlandt; Editing by Mark Potter and