L'Oreal sales rise on haircare boom and 'lipstick effect'

Luxury groups LVMH and Hermes both reported a decline in growth in their perfume and cosmetics businesses this week, although Unilever reported underlying sales growth of 8% in its beauty and wellbeing unit for the quarter.

In L'Oreal's Luxe division, representing a third of its sales, growth lagged forecasts at 4.7%, despite posting double-digit growth in China.

Problems in China's travel retail sector continue to curtail growth, it added.

Shares in L'Oreal are up 4% year to date.

PARIS, July 29 (Reuters) - The world's largest cosmetics company L'Oreal reported better-than-expected quarterly sales on Wednesday, boosted by strong demand for new hair products and mascaras.

The Paris-based maker of CeraVe skincare, Maybelline make-up and Valentino perfume said sales for the three months to end-June came to €11.6 billion ($13.21 billion), up 6.3% on a like-for-like basis after adjustment for the phasing in of its new IT system.

That was slightly above expectations of 5.7% growth in a consensus of analysts provided by Visible Alpha.

"This is a strong performance, especially in the context of peers struggling with demand," said analysts at Jefferies in a note, adding that they expected shares to outperform on Thursday.

The €200 billion company typically outpaces the global beauty market, with a portfolio ranging from mass-market L'Oreal Paris brand makeup and creams to high-end designer perfume and shampoos used in hair salons.

While growth slowed from 6.7% in the first quarter based on tougher comparisons, sales in the company's largest business unit, comprising mass-market products, increased more than expected, helped in Europe by growth in hair products and "a remarkable outperformance online".