L'Oréal S.A.

For the first half, L'Oréal reported sales up 5.8%, with adjusted like-for-like growth of 6.5% and like-for-like growth of 6.8% before the IT-transformation adjustment. Gross profit was almost EUR 18 billion, implying a 74.8% gross margin, up 10 basis points, and operating profit was EUR 5 billion, up 6.8%, with operating margin at a record 21.3%, up 20 basis points. Diluted EPS excluding nonrecurring items was EUR 7.40, up 4.8%, while operating net cash flow exceeded EUR 3 billion, up 13.9%. Looking ahead, management expects the global beauty market to grow between 4% and 5% for the full year and said L'Oréal intends to keep outperforming it; they also said leverage should be below 1 turn at year-end, all else equal.

Nicolas Hieronimus framed the quarter as evidence that the Beauty Stimulus Plan and innovation engine are working, saying new-product contribution has stepped up each semester and that the company is winning share across categories, channels, and geographies. He highlighted momentum in SAPMENA, China’s recovery, skin care, hair care, and fragrances, while stressing that e-commerce, consumer engagement, and AI are strengthening L'Oréal’s long-term competitive position. His tone was upbeat and increasingly confident, with repeated comments that the company is 'on a roll' and intends to 'keep winning.'

Christophe Babule emphasized the quality of the first half: 6.5% adjusted like-for-like growth, 74.8% gross margin, 21.3% operating margin, and more than EUR 3 billion of operating net cash flow. He broke out spending, noting R&I was nearly EUR 700 million, A&P was almost EUR 8 billion or 32.6% of sales, SG&A was EUR 4.3 billion and down 70 basis points, and capex was EUR 760 million, or 3% of sales. He also cited net debt of EUR 12.7 billion, gearing of 37.4%, and financial leverage of 1.2x, and said leverage should be below 1 turn by year-end.

Analysts pressed on Europe’s sustained outperformance, China’s recovery, skin care momentum, A&P and SG&A trends, SAPMENA growth, Gucci, Sanofi, and the impact of Galderma/Kering on dilution and EPS. Management said Europe is benefiting from strong market growth, category mix, e-commerce, and organizational simplification through clusters and ERP rollouts; China is improving as premium segments recover, and the company still expects the second half to be strong despite tougher comparisons. On Kering Beauty and Galderma, Christophe said Kering will be about 10 basis points dilutive at group level in 2026 and slightly negative on EPS, while financial expenses should be around EUR 400 million; on Sanofi, he said it remains a financial asset that currently brings in EUR 365 million of dividends and is not a priority to monetize.