L'Oréal (OR) Q1 2025 earnings summary

Executive summary

• Q1 2025 organic sales grew 3.5% like-for-like and 4.4% reported to €11.73 billion, with all divisions expanding and Luxe leading; growth was supported by a €100 million net impact from IT-related inventory building between 2024 and 2025.

• Europe and emerging markets, especially SAPMENA-SSA, were the strongest growth contributors, while the U.S. market was more challenging and China performed slightly better than expected.

• Fragrances and hair care were the fastest-growing categories, with the Makeup Stimulus Plan beginning to show results in a subdued market.

• The Beauty Stimulus Plan, new product launches, and innovation pipeline contributed strongly, with further growth expected as these expand into new markets.

• L'Oréal maintained global beauty market outperformance and received top ESG recognitions, including a ninth consecutive CDP triple 'A' score.

Financial highlights

• Group sales rose to €11.73 billion in Q1 2025 from €11.25 billion in Q1 2024, a 4.4% reported increase and 3.5% like-for-like growth, including a €100 million benefit from IT-related inventory building.

• Constant exchange rate growth was 4.0%; currency fluctuations had a 0.4% positive impact in Q1, with a full-year impact projected at -0.7% if current rates persist.

• Exceptional corporate income tax of around €250 million expected for the year.

• FX volatility could negatively impact net sales by 250-290 basis points if current rates persist; a €50 million negative FX impact is expected in the first semester.

• Net impact of changes in scope of consolidation was +0.5%.

Outlook and guidance

• Management expects to continue outperforming the global beauty market and to achieve another year of sales and profit growth, with growth expected to accelerate progressively, especially in the second half of the year.

• Priorities include driving growth, managing P&L to offset tariff hikes, and supporting international brands.

• Uncertainty remains high due to ongoing geopolitical turmoil and tariff wars, making precise forecasting difficult.

• No major restructuring planned; ongoing reorganization and IT transformation aim to increase agility and resource sharing.