Online sales drove L'Oreal revenues higher than expected during the last quarter of 2020. Due mostly to pandemic-induced stay-at-home orders and social media campaigns, the world's largest cosmetics group growth rebounded from retail closures earlier in the year. In a recent article on Reuters.com, Chairman and Chief Executive Jean-Paul Agon said, "With the pandemic, we've advanced by five years on the digital side."
The easing of lockdown restrictions and reopening of restaurants and retail shopping also boosted revenue growth at the end of 2020. L'Oreal reached 7.88 billion euros ($9.65 billion) and revenues increased by 4.8% compared to market estimates running between zero and 3%.
Earlier in the year, L'Oreal saw declines in makeup as luxury retailers and airport duty-free shops closed due to travel restrictions. Consumers restricted due to stay-at-home orders turned to skincare products and pampering treatments, like hair dyes.
L'Oreal professional products group saw 6.5% revenue gains in year-over-year comparison despite salon closures, while the Active Cosmetics Division saw increases of over 20%. The other big winner-China, which saw revenues increase 27% versus Q4 2019.
"L'Oréal has traversed this crisis in the best possible condition and has even grown stronger," Agon said in a statement. "As anticipated and announced, the group returned to growth in the second half, with a fourth quarter in acceleration, up 4.8 percent, and won significant market shares."
The future outlook looks healthy for L'Oreal as they remain optimistic makeup and fragrances will come roaring back in the post-COVID era. "Beauty is a category that needs to be smelled and touched in stores," said Nicolas Hieronimus.
Paul Agon recently announced he would step down on May 1st after 14 years as CEO of L'Oreal. His successor will be Nicholas Hieronimus, the current Deputy CEO. Agon joined L'Oreal as a product manager in 1987. He went on to be General Manager of L'Oreal Greece and France among other positions. In 2001, Agon was named head of L'Oreal USA, where he inspired the Garnier Fructis line's launch. In 2006, Agon was named CEO of the L'Oreal Group.
Agon continues to inspire the beauty world with his optimistic and enthusiastic outlook on the cosmetics industry's future. In a recent Beauty Packaging article, he states, "This was an opportunity to reset...We eliminated certain costs... This was an opportunity to find new ways of working, and this will have a positive impact going forward. We will do things differently than we did before."
L'Oreal USA recently announced it would support black-owned businesses and entrepreneurs through a partnership with the NAACP. In a press statement sent to Black Enterprise, Angela Guy, Chief Diversity & Inclusion Officer said "as the leading beauty company in the United States, we believe that we have a responsibility to invest in the small business owners and entrepreneurs who are the lifeblood of our dynamic beauty industry." The Inclusive Beauty Fund will provide one-time grants to Black-owned brands and businesses in the beauty sector.
"Black-owned small beauty businesses are the heartbeat of their neighborhoods, and beauty business owners are navigating tremendous challenges stemming from the Covid-19 and recent events," said Yumeka Rushing, chief strategy officer, NAACP.
Thanks to a simple video on TikTok, L'Oreal's Paris Infallible Fresh Wear Foundation-in-a-Powder became the viral hit of the holiday season. The product is easy to apply and, with a $10 to $15 price range, is in the reach of average drug store consumers. The New York Post reports, "TikTok user @rocio.roses posted a video of herself applying the powder in her car, comparing it to a designer brand on the other side of her face. Not only did the drugstore brand hold its own, but 5.1 million others watched it and have since wiped shelves clean of the product."
TikTok, Pinterest, YouTube and other social media channels continue to generate substantial interest in consumer products through viral 'hack' and 'how-to' videos and articles.
Saving water not only helps the environment, but it also saves money. Salons consume an average of 270 gallons/day/chair. Water Saver, a new device developed via a partnership with Gjosa, a Swiss environmental tech startup, provides a simple way for hair and beauty salons to reduce water consumption by up to 80%. The system attaches to hair washing stations and includes three slots for shampoo, conditioner and other treatments. Water Saver creates micro-ionized droplets reducing water consumption and features a dashboard that tracks product and water usage.
The development of the Water Saver is excellent news for salon owners. The salon business is not exceptionally environmentally friendly due to the amount of plastic and chemical waste they produce. If even a few thousand shops adopt the Water Saver system, it can save billions of gallons of water.
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