Company Reports

As the largest beauty product maker globally, L’Oréal has amassed an impressive collection of top-selling beauty brands across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer knowledge, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. We assign L’Oréal a Morningstar Economic Moat Rating of wide.

L'Oréal posted 6% like-for-like sales growth in the second quarter, extending the strong momentum. Growth was broad-based, led by double-digit gains in dermatological beauty and strength in North Asia. First-half operating margin reached a record level. Shares rose 3% in early trading on July 30.

L'Oreal posted 7.6% organic revenue growth during the first quarter, its highest rate of growth since the first quarter of 2024. Top-line growth was broad-based across segments, led by double-digit growth in professional products and dermatological beauty. Shares in the US ADR traded 7% higher.

As the largest beauty product maker globally, L’Oréal has amassed an impressive collection of top-selling beauty brands across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer knowledge, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. We assign L’Oréal a Morningstar Economic Moat Rating of wide.

L'Oreal's like-for-like sales rose 5% in the second half of fiscal 2025, led by 9% increases in both professional products (12% sales) and derma beauty care (16%). Operating margins expanded 10 basis points to 19.2% on a favorable product mix.

As the largest beauty product maker globally, L’Oréal has amassed an impressive collection of top-selling beauty brands balanced across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer knowledge, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. We assign L’Oréal a Morningstar Economic Moat Rating of wide.

L'Oréal's sales rose 3.4% organically in the first nine months, led by strength in hair care (up 7.4%) and derma beauty (3.7%). Revenue grew across all regions. In the third quarter, sales growth accelerated to 4.2%, up from a 3% pace in the first half.

On Oct. 19, L'Oréal confirmed it will purchase Kering's beauty business for EUR 4 billion in cash. Kering Beauté generated roughly EUR 323 million in 2024 sales, primarily from fragrance brand Creed. The deal is expected to close in the first half of 2026.

As the largest beauty product maker globally, L’Oreal has built an impressive collection of top-selling beauty brands balanced across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer experience, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. As such, we award L’Oreal a wide economic moat rating.

L'Oreal's sales rose 2% in the first half, led by professional products (up 5%) while a 30-basis-point bump in operating margins to 21.2% drove operating profits up by 3%.

As the largest beauty product maker globally, L’Oreal has built an impressive collection of top-selling beauty brands balanced across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer experience, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. As such, we award L’Oreal a wide economic moat rating.

L’Oreal's revenue grew by 4.4% to EUR 11.7 billion in the first quarter of 2025, or 3.5% like-for-like. Sales expanded across all four divisions, led by its luxury brands, which posted a 5.8% organic growth.

Beauty names came under pressure following the Donald Trump administration’s tariff announcements on April 2, mainly reflecting investor concerns over higher costs for products from Europe. US-based Estee Lauder and Coty sold off 15% and 7%, respectively, while price movements were milder for Europe-based peers L’Oreal (negative 2%) and Puig (negative 5%).

As the largest beauty product maker globally, L’Oreal has built an impressive collection of top-selling beauty brands balanced across core categories (skin care, color cosmetics, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer experience, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. As such, we award L’Oreal a wide economic moat rating.

Wide-moat L'Oréal posted solid 2024 results, with sales and earnings per share up 6% and 5%, respectively. We give management credit for a sharp focus on premium fragrances and agile omnichannel strategies, and we remain constructive on the firm's long-term prospects, underpinned by strong brands and distribution expertise. We plan to maintain our EUR 410 fair value estimate, rendering shares attractive.

Wide-moat L’Oréal delivered a 6% sales growth (8% in constant currency) in the first nine months. We attribute its resilient performance to a sharper focus on attractive subsegments (such as haircare and luxury fragrances), agile marketing, and expansion on Amazon, which have combined to more than offset persistent demand headwinds in China. Given healthy premium beauty demand in the US and Europe—in particular, booming trends in fragrances that should bode well for holiday sales—we view our 7% sales growth forecast for 2024 as achievable. We don’t plan any material changes to our EUR 410 per share fair value estimate based on our 10-year forecasts for high-single-digit sales growth and operating margins in the low 20s. Shares look undervalued.

As the largest beauty product maker globally, L’Oreal has built an impressive collection of top-selling beauty brands balanced across core categories (skin care, color cosmetics, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer experience, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. As such, we award L’Oreal a wide economic moat rating.

Wide-moat beauty product maker L'Oréal announced on Aug. 5 it had taken a 10% stake in newly listed peer narrow-moat Galderma, which generates 52% of 2023 sales from injectable aesthetics and ranks as the number two globally in this market behind wide-moat AbbVie. While the price tag was not disclosed, we estimate the deal is worth roughly $1.9 billion based on Galderma’s closing price last Friday. This is the largest transaction done by L'Oréal, following its $2.5 billion purchase of Australia-based Aesop in 2023. That said, relative to L'Oréal’s $220 billion market cap, the deal is small, and we are maintaining our EUR 410 fair value estimate. Shares look slightly undervalued.

Wide-moat L’Oréal posted solid results for the first half, reaffirming our confidence in its long-term outlook underpinned by trusted brands, research strength, and a balanced mix of premium and mass offerings. Revenue grew 7.3% like for like, led by derma skincare strength and improved haircare and makeup products for the mass segment, and operating profits rose 8%. We think our 2024 estimates for sales and operating profits to grow by 9% and 11%, respectively, remain achievable, and there is no change to our 10-year forecasts for high-single-digit sales growth and operating margins in the low 20s. We maintain our EUR 410 fair value estimate, and shares look slightly undervalued.

As the largest beauty product maker globally, L’Oreal has built an impressive collection of top-selling beauty brands balanced across core categories (skin care, makeup, hair care, and fragrance) that straddle the premium and mass segments. We believe its strong brand differentiation based on innovation, marketing, and consumer experience, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. As such, we award L’Oreal a wide economic moat rating.