L’Oreal the cosmetic giant declared its quarterly results today for December 2011. The company has been able to declare good results. The profits have been up for the company however sales have been down for the company in key markets such as Europe and US. The company hopes improved standard of living in Asian countries could provide some respite for the company for the next few quarter. The company has also declared that heiress Liliane Bettencourt, France’s wealthiest woman, would no longer serve on its board of directors, a seat she held for 17 years. Her 25-year-old grandson, Jean-Victor Meyers is expected to replace her, pending the approval of shareholders at the company’s annual meeting.
Commenting on the results CEO Jean Paul agon stated “We are well equipped to succeed in our strategy of universalizing beauty and to achieve another year of sales and profit growth in 2012,”
The company also provided a robust earning guidance for the upcoming quarter. The company expects the annual cosmetics markets to grow at 4 percent annually. Annual sales rose 4.3% on a reported basis and 5.1% on a like-for-like basis to EUR20.34 billion, while growth kept the same pace in the fourth quarter as consumption slowed in Europe. In the last three months of the year, L’Oreal posted sales of EUR5.26 billion. The company is really hoping on the Asian markets to provide traction in the upcoming quarters. Asia pacific region grew in the range of over 13 percent and Latin America at around 11 percent.
We remain negative on the stock at current prices and would recommend buying the stock once the prices correct. The overall growth story of the stock does look good at the moment.