WHAT HAPPENED? L'Oreal announced a rise in Q3 revenue, especially in the European and American markets, but encountered a drop of 4.8% in sales in North Asia.

THE DETAILS: The sales decline in North Asia was primarily linked to the Chinese government's heightened control over daigou resellers, impacting the travel retail sector. Nevertheless, L'Oreal anticipates the effect on profit margins to be limited and manageable, with expectations of ongoing inventory reductions until the end of the year. In mainland China, L'Oreal saw a growth of 7.7% over the first nine months, increasing its market share.

THE CONTEXT: L'Oreal's performance in China holds particular significance for investors, given the challenging economic environment in the post-pandemic era. The company maintains its commitment to expanding in China, with a focus on extending its presence in lower-tier cities. Meanwhile, L'Oreal exceeded expectations in terms of sales in Europe and North America, although the global growth of its luxury division saw a deceleration.