L'Oréal (OR) Q4 2025 earnings summary

Executive summary

• Achieved record sales of €44.1 billion in 2025, with 4.0% like-for-like growth and 1.3% reported growth, outpacing the global beauty market and most large peers, with acceleration in the second half driven by innovation and strong performance in the U.S. and China.

• Gross margin reached a record 74.3% (+10bps), and operating margin rose to 20.2% (+20bps), both all-time highs, despite FX and tariff headwinds.

• All divisions and regions delivered growth, with Professional Products leading at +7.5% like-for-like and emerging markets up 9.7%.

• E-commerce sales surpassed 30% of total sales, reaching over €13 billion, with strong digital and AI investments and double-digit growth.

• Major acquisitions, including the largest ever (€4.66bn for Kering Beauté), and €1.5bn invested in tech and AI, expanded the portfolio and accelerated innovation.

Financial highlights

• Sales: €44.05 billion (+4.0% like-for-like, +1.3% reported year-over-year), with a negative 3.6% FX impact due to euro appreciation.

• Net profit excluding non-recurring items was €6.81 billion; after non-recurring items, net profit was €6.13 billion, down 4.4% year-over-year.

• Operating profit rose 2.4% to €8.89 billion; operating net cash flow was €7.16 billion, up 7.8%.

• Dividend proposed at €7.20 per share (+2.9%), payout ratio at 56.6%.

• Net debt/EBITDA at 0.2x, reflecting a robust balance sheet.

Outlook and guidance

• Entering 2026 with strong momentum, aiming to accelerate growth and innovation across all divisions and markets.

• Tariff headwinds may increase, but positive mix and pricing are expected to support margins.

• The Beauty Stimulus Plan and structural step-up in launch activity will further boost innovation in 2026 and beyond.

• E-commerce and emerging markets remain key growth drivers; India is targeted for improved performance with new leadership and investments.

• Confident in outperforming the global beauty market in 2026 despite macro uncertainties.