'Fingers crossed' is not what investors want to hear as L'Oreal shares get slammed
By Steve Goldstein
L'Oreal shares slumped on Wednesday.
L'Oreal shares slumped on Wednesday as the chief executive of the highly valued cosmetics company didn't express huge confidence over upcoming sales.
The 6% slide in L'Oreal stock (FR:OR) was the worst since Feb. 9, 2024.
CEO Nicolas Herionimus was discussing the company's outlook that the global beauty market will grow 4% this year and said "fingers crossed" it will meet that target given the upcoming China's Singles' Day festival on Nov. 11 and holiday season in America and Europe. L'Oreal targets an outperformance of the global beauty market.
"This lacked conviction, in our opinion, and we expect the market wanted a lot more visibility for 29x forward price-to-earnings," said analysts at Deutsche Bank led by Tom Sykes. According to FactSet data, that's the sixth most expensive stock in the French CAC 40 index FR:PX1, with the most expensive being Hermes International (FR:RMS) at 47 times earnings.
L'Oreal late Tuesday reported like-for-like sales growth of 4.2%, underperforming the 4.9% consensus.
Hermes shares separately came under pressure as the luxury group said third-quarter revenue rose 9.6% at constant currencies, very slightly outperforming expectations of 9.4% growth.
Analysts at UBS said the in-line numbers were a disappointment after LVMH (FR:MC) did beat on third-quarter results and that it didn't show signs of a significant recovery in Asia outside of Japan.
-Steve Goldstein
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10-22-25 0823ET
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