L'Oreal 2Q numbers

Last week our favourite beauty company, L'Oreal reported their half year numbers. Given that they are based in Europe and not the US, their earnings got a big boost from the stronger dollar which is a nice change.

Here go the numbers: Sales are up 14.7% (5% at constant exchange rate), operating profit is up 14.5% and EPS is up a solid 18.9%. Below is the breakdown of how each division and region did.



Have a look at the whopping growth in North America, a large chunk due to the stronger dollar. We own the shares in US Dollars though which hurt the share performance a bit. L'Oreal's primary listing in Euro's is up 26% ytd compared to the US based shares which are up 15% over the same time. In Europe where currency fluctuations don't have an impact and GDP growth has been flat, they managed to grow sales by 5%.

In their other regions, particularly in developing countries they have solid double digit growth. They had poor numbers out of Brazil where they said ". . . Brazil where the economic context is very unfavourable. The Brazilian Real is weaker by over 50% over the last 12 months!

The story of why you own this stock is still the same. As the world gets richer and as the large number of young people move toward working age, people will consume more of L'Oreal's products (Discover our Brands). They are a great stock, for whom the market has big expectations. So far they have met those expectations and look well positioned to do so going forward. Buy