L’Oreal posts weaker-than-expected quarterly sales

L’Oreal has posted below-forecast quarterly sales and downgraded its fiscal-year guidance.

The French cosmetics group said on Thursday that its third-quarter organic growth was 2.7 per cent, while analysts had been expecting five per cent.

The company’s sales over the same period rose 3.4 per cent to 4.27 billion euros (3.66 billion pounds).

Chief executive officer of the company, Jean-Paul Agon, said: “Since September, we have noted a clear slowdown in some markets in Western Europe and North America, and have been confronted with a contraction of purchasing by some distributors in view of the current economic crisis.”

L’Oreal now targets earnings per share growth for 2008 of between seven and eight per cent, with comparable sales expected to increase by approximately four per cent.

Mr Agon added the company has made the decision to carry on with advertising and promotional support for its brands in the fourth quarter, in order to most effectively prepare for 2009.

Shares in L’Oreal fell 7.7 per cent to 56.10 in Paris, but were off an early low of 53.32 euros which represented a drop of more than 12 per cent from Thursday’s close.

According to the company, 67 per cent of women in the UK use one or more L’Oreal product.