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(Sharecast News) - L'Oral shares slid in early Paris trading on Friday after the world's biggest beauty group reported fourth-quarter sales that fell short of expectations, weighed down by a weaker-than-anticipated performance in North Asia and a slowdown in travel retail.
The company said like-for-like sales rose 6% in the quarter to about 11.25bn to 11.3bn, slightly below the consensus forecast of roughly 6.3% to 6.5%, prompting analysts to question whether top-line momentum can accelerate meaningfully in 2026.
For 2025, L'Oral reported sales of 44.05bn, up 4% like-for-like and 1.3% on a reported basis, with management highlighting a broad-based second-half improvement led by a recovery in the US and China.
Currency moves were a notable drag, with the group citing a negative 3.6% impact on reported revenue.
CEO Nicolas Hieronimus said the company delivered "strong results regardless of the context" and argued that a stepped-up launch plan and a gradually improving beauty market supported a quarter-by-quarter acceleration through the year.
Profitability improved despite the softer top-line print.
L'Oral's gross margin rose to 74.3% and operating margin increased to 20.2%, while earnings per share edged up 0.4% to 12.71.
The board proposed a dividend of 7.20 per share, up 2.9%, and said net cash flow rose 7.8% to about 7.2bn.
It also said e-commerce grew at a double-digit rate and exceeded 30% of sales.
The quarterly shortfall was concentrated in Asia, where the region that includes China disappointed after earlier signs of stabilisation.
Finance chief Christophe Babule told analysts that softness in South Korea and weaker mainland China travel retail - which he linked to changes among domestic airport operators - weighed on performance.
Reuters reported that the company's North Asia momentum stalled versus expectations, while investment banks flagged the quarter as a complicating factor for any near-term acceleration narrative.
By division, professional products again led full-year growth, while dermatological beauty was a standout in the fourth quarter, supported by La Roche-Posay demand and CeraVe initiatives, according to market reports.
Investors were more focused on signs of pressure in luxury, with analysts and media pointing to travel retail weakness in Asia and a softer-than-hoped performance in North Asia as key concerns for sentiment around the Luxe business.
Alongside results, L'Oral reiterated its push into adjacencies and technology.
The group recently completed the purchase of an additional 10% stake in Galderma, taking its holding to 20%, and has pitched aesthetics as a strategic extension of its beauty portfolio, while also pointing to AI and "beauty tech" initiatives, including product showcases at CES 2026 and the creation of a beauty tech hub in India.
L'Oral also flagged board changes ahead of its 24 April annual meeting, proposing the renewal of Jean-Paul Agon's and Patrice Caine's mandates, maintaining the split of chairman and CEO roles, and nominating Nestl chairman Pablo Isla and Nestl HR chief Anna Lenz as directors, alongside Eramet chair Christel Bories.
At 1145 CET (1045 GMT), shares in L'Oreal were down 4.17% in Paris at 375.30.
Reporting by Josh White for Sharecast.com.