French cosmetics firm L'Oreal SA said Thursday its profit rose in the first half of the year, fueled by strong sales in luxury products and an increase in online sales.
Net profit increased to EUR2.04 billion ($2.38 billion) from EUR1.48 billion a year earlier, the company said. Operating profit rose 7.1% from a year ago to EUR2.53 billion.
Sales climbed 4% in the first half. They totaled EUR6.56 billion in the most recent quarter, a 3.5% rise.
"In a beauty market which, as in the first quarter, turned out to be highly contrasted and atypical, the group has continued to expand, with solid organic growth and differentiated performances across the divisions," Chief Executive Jean-Paul Agon said in a statement.
L'Oreal posted a 4.3% rise in like-for-like sales in the three months ended June 30. L'Oreal Luxe did particularly well, benefiting from a boom in makeup sales, while L'Oreal's active cosmetics unit that includes La Roche-Posay and Roger & Gallet brands also performed strongly. Like-for-like sales strip out acquisitions, disposals and currency swings.
The company's units selling professional and consumer products grew more slowly but are improving, L'Oreal said.
Mr. Agon said he expects sales and profits to grow this year, but didn't provide specific forecasts.
Nestle SA, which owns a 23% stake in L'Oreal, is under pressure from Daniel Loeb's Third Point, as the hedge fund is demanding a series of moves to boost shareholder return, including a review of the Swiss food giant's stake in French cosmetics firm.
In its earnings release, L'Oreal didn't refer to any potential shareholding change.
L'Oreal last month agreed to sell The Body Shop to Natura Cosmeticos SA, after reviewing the strategic options for what has been the company's worst-performing business in recent years. Mr. Agon said this would allow the company to strongly increase profitability this year and accelerate its market-share gains
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(END) Dow Jones Newswires
July 27, 2017 14:05 ET (18:05 GMT)