L'Oreal suffers 'sluggish growth' in United States

PARIS, France - French cosmetics giant L'Oreal reported a 4.1 percent rise in second-quarter comparable sales on Thursday, slightly below expectations, and said growth at its consumer goods division was held up by sluggish demand in the United States.

L'Oreal, whose brands include Lancome creams and Yves Saint Laurent perfumes, saw revenue drop 0.7 percent on a reported basis in the second quarter.

The consensus market forecast for the group's second-quarter like-for-like sales growth was 4.3 percent.

L'Oreal said growth at its consumer products unit that makes Garnier shampoo and L'Oreal cream, was "held back by a sluggish American market and, to a certain extent, by a slowdown in the new markets, but remains solid in Western Europe."

L'Oreal management is expected to provide more details about current trading at a conference call on Friday at 0700 GMT.

The group said its consumer products unit was well positioned to benefit from a gradual improvement in European markets even though second-quarter revenue fell 2.8 percent on a reported basis.

The strongest division within the group was luxury with like-for-like sales up 7.5 percent in the second quarter, while the group's active cosmetics division saw growth of 7.4 percent, down from 8.7 percent in the previous three months.

Last month L'Oreal's chief executive Jean-Paul Agon told Reuters in an interview that he expected the group's active cosmetics unit - the maker of La Roche Posay creams - to be its biggest engine of growth in the years to come and flagged weakness in America.

L'Oreal's operating margin widened to 18.2 percent in the first half from 17.9 percent in the same period last year. Net earnings per share rose 7.5 percent to 3.17 euros.

"This is a pretty uneventful set of results as the numbers throughout the profit and loss account are in line with expectations," one London-based analyst said.