L'Oreal 9 month sales

L'Oreal released a 9 month sales update towards the end of last week, this was for the sales period to end at September 30th, 2015. Emerging markets seem to be the biggest issue, a slowdown in China with specifically L'Oreal Luxe and what they term a "difficult Brazilian market", plus general Asia market turbulence. At face value the sales update looks decent, herewith a breakdown of the product and geographic mix:



In Euro terms sales looked excellent, up 13.2 percent when compared to the prior year, at constant exchange rates the growth was a less impressive, showing a 4.9 percent growth over the corresponding 9 month period. For some reason the third and fourth quarter seem to be worse than the first and second, Northern hemisphere summer time maybe, gearing up early? Even if the group have a comparable fourth quarter to the full year, I think that they would have done a great job in a tough market.

Whilst we have very little to work with, for three months now. The market clearly did not like this, the stock was down 4.57 percent in Paris and down 3.37 percent in New York Friday. Clearly the market is expecting greater things, the stock trades on a 30 multiple, they need to deliver the goods. Year to date the stock in New York (where we own them) is up 9.4 percent, relative to a market that is up a single percent. In Euro terms the stock reflects a far greater gain, up 19.2 percent for the year. We continue to accumulate what is a great middle income growth story, across multiple territories. From time to time you are going to have these currency headwinds or tailwinds, know that the longer dated story is intact.