L'Oréal S.A.

L'Oréal said H1 sales rose 5.8%, or 8.6% excluding FX, and adjusted like-for-like growth was 6.5% after the IT transformation impact. Gross profit was almost EUR 18 billion, with gross margin at 74.8% (+10 bps), operating profit was EUR 5 billion (+6.8%), and operating margin was 21.3% (+20 bps), a first-half record. Diluted EPS was EUR 7.40 (+4.8%), net profit attributable to the company was EUR 3.5 billion (+5.3%), and operating net cash flow was EUR 3.1 billion (+13.9%). For the full year, Christophe Babule said FX should be a 0.6% drag on sales, compared with the 2.5% drag previously expected, and leverage should be below 1 turn at year-end. Nicolas Hieronimus said the full-year global beauty market should grow 4%-5% and that L'Oréal expects to outperform it.

Nicolas Hieronimus framed the quarter as proof that L'Oréal’s innovation engine, digital capabilities, and portfolio breadth are driving continued share gains. He highlighted stronger new-product contribution, e-commerce leadership, consumer engagement, and the ability to win across categories, price points, channels, and geographies. His tone was upbeat and confident, repeatedly saying the company is “on a roll” and entering the second half with confidence.

Christophe Babule emphasized the quarter’s profitability and cash generation: gross margin was 74.8%, operating margin was 21.3%, gross cash flow was EUR 4.8 billion, capital expenditures were EUR 760 million, and operating net cash flow exceeded EUR 3 billion. He noted SG&A fell 70 bps in relative terms, while A&P rose 70 bps to 32.6% of sales to support innovation and newer brands. He also said net debt was EUR 12.7 billion at June 30, gearing was 37.4%, financial leverage was 1.2x, and leverage should finish the year below 1 turn.

Analysts focused on Europe’s sustained outperformance, China’s recovery, skincare momentum, A&P/SG&A tradeoffs, SAPMENA’s rapid growth, the Innovest deal in India, the Sanofi stake, and the new Gucci license. Management said Europe benefits from category mix, faster e-commerce, and organizational simplification through clusters and ERP changes; China is stabilizing with a stronger premium mix, where L'Oréal is gaining share. On skincare, management said growth is broadening but uneven by division, with CeraVe and L'Oréal Dermatological Beauty strongest and Medicaid still early in its rollout. On capital allocation, Christophe said Sanofi remains a financial asset, while Nicholas said Gucci is a long-term opportunity that will take time to build.