L'Oreal H1 Profit Rises - Update

(RTTNews) - French cosmetics giant L'Oreal SA (LRLCY.PK), Thursday reported an small increase in profit for the first half of 2014, as decline in sales were offset by better margins and lower promotion costs.

L'Oreal's first-half profit attributable to the company rose to $1.73 billion euros or 2.85 euro per share from 1.71 billion euros or 2.81 euro per share last year.

Adjusted profit from continuing operations was 1.77 billion euros or 2.92 euros per share, flat with last year.

Gross margin improved slightly to 71.8 percent from 71.7 percent last year, while advertising and promotion expenses dropped 70 basis points to 29.3 percent of sales from last year.

Sales for the first half dropped to 1.5 percent to 11.17 billion euros from 11.34 billion euros last year. On a like-for-like basis, revenues were up 3.8 percent.

Sales in North America slipped 4.4 percent to 2.62 billion euros from last year. Sales from Western Europe rose 2.4 percent to 3.98 billion euros.

Sales from new markets declined 3.1 percent, as sales across Asia Pacific, Eastern Europe, Latin America dropped except a 9.3 percent growth in Africa and Middle East. Sales at Latin America, Eastern Europe, and and Asia Pacific dropped 8.9 percent, 6.2 percent and 0.8 percent, respectively.

Cosmetic segment sales for the first half inched down 1.5 percent, hurt largely by sales slump at consumer products and professional products segment. Body Shop segment sales dropped 1.4 percent.

L'Oreal reported its second-quarter sales decreased to 5.54 billion euros from 5.58 billion euros last year. On a like-for-like basis, sales were up 4.1 percent.

"In an uncertain economic and monetary environment, we are confident in the Group's ability to once again outperform the market in 2014 and to post another year of like-for-like sales growth, improved profitability and increased net earnings per share," Chief Executive Jean-Paul Agon said.

LRLCY is currently trading at $33.98, down $0.26 or 0.74%, on the OTC markets.