L'Oreal shares surge 8% as beauty sales beat forecasts

L'Oreal, the world's largest cosmetics company, saw its shares surge 8% on the Paris Stock Exchange after reporting first quarter 2026 sales of 12.152 billion euros, a 3.6% increase from 11.734 billion euros in the same period last year. The company's organic sales growth reached 7.6%, significantly surpassing analyst expectations of approximately 3%, a performance Barclays analysts described as "very impressive" with cosmetics markets showing growth of 4% and "no signs of slowing." CEO Nicolas Hieronimus attributed the results to the "lipstick effect," where consumers turn to affordable beauty products during times of economic uncertainty. By region, Europe led growth at 11.5% to 4.365 billion euros, while North America rose 2% to 3.032 billion euros, Latin America gained 5.1% to 858 million euros, and Africa, South Asia, and the Middle East advanced 12.1% to 1.21 billion euros. North Asia was the sole underperformer, declining 9% to 2.687 billion euros. By business segment, professional products showed the strongest performance with 14.5% growth to 1.462 billion euros, while luxury products grew a modest 0.3% to 4.107 billion euros. Hieronimus stated that L'Oreal had an "excellent beginning" and is not only outperforming a dynamic beauty market but accelerating its global market share gains. Bankinter analysts upgraded the stock to "buy," noting the sales recovery driven by strong innovation capabilities and expecting momentum to continue in the second quarter pending resolution of Middle East tensions. The analysts also highlighted the company's nearly debt-free position and recent acquisitions including Kering Beauté for 4 billion euros and increased stake in Galderma from 10% to 20% for 5.188 billion euros as factors supporting continued organic growth.