The Chinese crisis takes the shine off L’Oréal as sales in its North Asia division fall 6.5%

L’Oréal last night became the latest major Western consumer brand to warn about weak demand in China.

The Paris-listed French beauty giant, owner of brands such as Mugler and Lancome, posted global sales growth of 3.4 per cent to £8.6bn for the three months to September 30.

But analysts had forecast a 6 percent rise. Sales had grown 5.3 percent in the previous quarter.

L’Oreal was dragged down by a disappointing performance in its North Asia division, which is mainly China.

Sales in this region fell 6.5 percent as the beauty market “continued to deteriorate, affected by low consumer confidence,” a L’Oreal spokesperson said.

Consumers in China – the world’s second-largest economy and a crucial market for consumer goods groups – have reined in spending amid an economic slowdown and housing market crisis.

L’Oréal shares have fallen about 17 percent so far this year.

Chief executive Nicolas Hieronimus said: “The situation in (China) has become even more challenging, but we believe in the future of this market and hope that government stimulus will help improve consumer confidence.”

China has pledged to revive its economy and last month its central bank launched its largest stimulus package since the pandemic.