L'Oreal stock pops 9% after 'impressive' earnings, on track for biggest gain in 18 years

Shares of the world’s largest cosmetics company L’Oreal popped as much as 10% after it reported quarterly growth ahead of expectations after the bell on Wednesday, as the beauty market shows no signs of slowing.

Organic sales rose 7.6% in the first quarter to 12.2 billion euros ($14.3 billion), compared to expectations of around 3-4%, according to analysts. Stripping out the impact from one-off items, growth was 6.7% in the quarter.

“We not only outperformed a beauty market that remains dynamic but accelerated our market share gains around the world,” CEO Nicolas Hieronimus said.

“Our e-commerce leadership allows us to double down on the winning channel with spectacular results across all regions, especially emerging markets,” he added in a statement. “The second half 2025 recovery in our two largest countries, the US and China, continued and we outpaced the market in both.”

Underlying growth was “very impressive,” said Barclays analysts. “Cosmetics markets growth of 4% is showing no signs of slowing,” they said. “Its [L’Oreal’s] beauty stimulus plan is resulting in even stronger share gains even in volatile times.”

Shares were last seen up 9%, on track for their largest daily gain since November 2008.

L’Oreal, which operates in an industry adjacent to both consumer goods and luxury, has proven to be resilient to macroeconomic challenges and general sector downturns.

Consumer goods companies are sharpening their focus and strategically reassessing their portfolios as former growth drivers cool, and consumers are increasingly selective amid rising living costs.

Consumer goods giant Unilever recently said it will sell off its food business to McCormick, and last year spun off its ice cream unit, to pivot toward its more high-growth health and beauty care, which includes labels Dove, Dermalogica, and TRESemmé.

Meanwhile, L’Oreal last month completed its acquisition of Kering Beauté, the Gucci-owner’s beauty unit, for 4 billion euros.

Luxury players are showing an uneven recovery following a boom that ended in 2022. Analysts have flagged a broader “pause” in the industry’s rebound as sales take a hit from the conflict in the Middle East.

L’Oreal, which owns not only its namesake brand but also hair products Kérastase, Garnier, and NYX Professional Makeup, said it saw growth in all divisions, which span cosmetics, haircare, skincare, and perfumes.

Professional products, including haircare, drove growth with a 13.1% increase like-for-like in the quarter, despite being the group’s smallest unit.

Jefferies analysts noted L’Oreal’s beat across its key regions, the U.S., Europe, and China, with the latter “despite inventory reset in Consumer Division & ongoing travel retail disruption.”