L’Oreal sales bolstered by Chinese demand for luxury skincare creams

French beauty group L’Oreal trumped sales forecasts towards the end of last year, as Chinese demand for high-end skincare products boosted fourth-quarter results.

Shares edged up slightly in morning trading after the firm reported an 8.6 per cent rise in the final quarter of 2018, following strong demand for goods in the firm’s luxury and active cosmetics divisions.

Full-year operating profit for 2018 jumped 5.3 per cent to €4.7bn (£4.1bn) with sales margins rising to 18.3 per cent from 18 per cent at the end of 2017.

Andrew Wood, an analyst at brokerage Bernstein, said: “Overall, the results were ahead of expectations on fourth quarter top-line, but below on second half margins and earnings per share growth.”

Jean-Paul Agon, chairman and chief executive of L’Oréal, in a statement: “The performance by geographic Zone remained differentiated…In Western Europe, progress was held back by difficulties in some markets, while growth in North America improved compared with the previous year. The New Markets achieved their best performance since 2007, and the Asia Pacific Zone, driven by China, has now overtaken North America.”

Robust demand from the Asia-Pacific has helped maintain the cosmetic giant’s sales sheet over the last 12 months, despite trade war tensions between China and the US denting revenue in other luxury sectors.