Wide-Moat L’Oréal Reports Another Quarter of Impressive Sales Growth, but Shares Appear Rich

Wide-moat L’Oreal reported first-half like-for-like sales growth of 13.5%, balanced between volume and price/mix. This tops our 10.4% full-year LFL estimate despite COVID-19-related lockdowns in China during April and May. Per the firm, the global beauty market grew 6% during the period, indicating it achieved sizable share gains. Further, despite initial signs of economic softening, Luxe (37% of period sales) was resilient with 16% LFL growth and remains robust through July.