Beauty giant L'Oréal, besides posting financial results that beat expectations, is offering high-level optimism, promising a resurgence in sales and a new "Roaring '20s."
"Like a flower after winter, beauty is ready to blossom after COVID goes away," says Nicolas Hieronimus, the Paris-based conglomerate's incoming chief executive officer, in a webcast for investors.
Adding that the company is already seeing fiesta-like gains in China, "we are confident that, like in the roaring '20s, there will be a big beauty party. Beauty is and always will be essential."
Those upbeat remarks are likely to cheer up many in the industry. Between working from home, wearing masks and keeping six feet away from anyone, consumers felt little reason to buy makeup or spritz on fragrances, depressing sales.
The NPD Group, a market research company that tracks beauty sales, reports that prestige cosmetics tanked 19% for the full year, falling to $16.1 billion. Makeup dropped the most, down 34%.
L’Oreal’s Hieronimus made his remarks as the company presented solid quarterly results. Even as industrywide sales tumbled, L'Oréal bucked the trend. Comparable sales rose 4.1% in its fourth quarter, and the company says it is winning significant market share gains in many categories.
The company's ecommerce revenues soared 62%, with gains in all geographic regions. It now accounts for a record 26.6% of the total sales for the year. "The huge surge is helping to democratize beauty," he says. "And consumers of beauty remain strong. We saw rapid recovery everywhere when stores reopened."
Hieronimus also says he expects the company to continue to benefit from skincare's growing importance, which now accounts for 40% of sales.
In terms of marketing, he says digital spending now accounts for 60% of its budget.
Describing beauty as "both a need and an aspiration," Hieronimus says he believes the company will continue to outperform competitors because of its focus on data, AI, research and innovation. "We are ahead of the curve in digitalization."
And he says consumers will continue to reward companies with a strong brand purpose, a commitment to social values and "acting for the greater good. We create the beauty that moves the world."