L’Oréal’s Secret Sauce for Growth
The company’s business keeps accelerating, as does the beauty market.
NEW YORK — L’Oréal’s business — and that of the beauty market — keep picking up speed.
The company’s second-quarter revenues broadly beat market expectations, registering 6.3 percent adjusted like-for-like growth to 11.62 billion euros. That compares to consensus of 5.6 percent.
The market smiled on L’Oréal’s results a day after their release. Its stock closed Thursday up 2.7 percent to 394 euros.
“Our second quarter kept the strong rhythm of the first, and we delivered the promised acceleration versus 2025,” said Nicolas Hieronimus, L’Oréal chief executive officer, addressing financial analysts and journalists during a call on Thursday morning.
He highlighted that since the start of 2025, adjusted like-for-like growth has been gaining speed semester after semester, from 3.2 percent to 4.9 percent to 6.5 percent in first-half 2026.
The global beauty market growth has also been accelerating since the beginning of last year. It stood at about 4.5 percent in the first six months of this year.
“The grimmer the economic and geopolitical headlines, the more consumers crave an affordable feel-good treat — or as I like to call it, the ‘dopamine effect’ of beauty,” Hieronimus said.
For the first half, sales at the maker of Lancôme, Kiehl’s and Garnier products were 23.78 billion euros, up 6.5 percent on an adjusted like-for-like basis.
Net profit, excluding non-recurring items, amounted to 4 billion euros, with diluted earnings per share coming in at 7.40 euros, up 4.8 percent compared to first-half 2025.
L’Oréal’s three developed geographic regions posted solid adjusted like-for-like growth. “At 6.1 percent, Europe remains very robust,” said Christophe Babule, L’Oréal chief financial officer. “At 6.7 percent, North America maintained its strong rhythm, thanks in particular to Professional Products and Dermatological Beauty.”
In North Asia, sales grew 4.6 percent, or 6.1 percent without travel retail. “The key contributor was the acceleration in China, driven by the continued recovery in Luxe,” Babule said. “Emerging markets was the most dynamic region, growing at close to 10 percent. [The South Asia Pacific, Middle East, North Africa and sub-Saharan Africa region] advanced at an impressive 13.8 percent and in a more challenging context.”
Hieronimus gave a shoutout to Vietnam, which was up more than 50 percent, and to India, which had a strong acceleration of 17 percent, well ahead of the market there.
Latin America, which grew at 5.2 percent, was the only region that was at a level below 2025, but L’Oréal is starting to see the first signs of stabilization there.
“In that context, we increased our outperformance and expanded our market share,” Hieronimus said.
Every one of L’Oréal’s divisions grew on an adjusted basis in the first half.
Professional Products posted growth of 11.6 percent, boosted by the ongoing boom of premium hair care. It outperformed the professional market more than twofold. Consumer Products advanced 4.3 percent, with L’Oréal Paris delivering exceptional growth driven by hair care. L’Oréal Luxe was up 5.1 percent, boosted by the recovery in China and the continued dynamism of fragrance. L’Oréal Dermatological Beauty registered 10.6 percent gains, marking a third consecutive quarter of double-digit growth, with both skin care and hair care contributing. That was led by CeraVe.
Each of L’Oréal’s product categories progressed, too. With an uptick of 15.6 percent, hair care was the most dynamic. “Each division contributed strongly, growing in double digits,” Babule said.
“Fragrances maintained their double-digit pace at 10.3 percent, with strong contributions from Prada, Valentino and Aesop,” he said. “Skin care accelerated strongly to 5.8 percent, as Dermatological Beauty maintained its double-digit rhythm and Luxe gradually improved.”
Skin care contributed one-third of L’Oréal’s growth in the first half.
Hair color was up 3.5 percent, driven by Consumer Products, while Professional Products gradually picked up pace. Makeup grew by 2.5 percent, penalized by service levels in the Americas.
“Since our beauty stimulus plan kicked into gear at the start of last year, the change in sales contribution from new products has been accelerating each semester, from 100 basis points to 200 basis points in ’25 to 250 basis points in the first half of 2026,” Hieronimus said.
E-commerce is beauty’s fastest-growing retail channel — an area where L’Oréal has leadership, overindexes and outperforms.
The group’s e-commerce grew by 18 percent, almost twice as fast as the market, and reached 7.4 billion euros. Versus the first half of last year, that’s an increase of more than 200 basis points for the group. Concurrently, in emerging markets, the rate of e-commerce rose by more than 400 basis points.
L’Oréal’s brick-and-mortar business gained 2.5 percent, thanks to strong partnerships with key retailers.
Hieronimus highlighted the group’s consumer engagement as being at the heart of what L’Oréal does. He said it’s where “we are winning, thanks to the unique combination of our scale and agility.”
“In an increasingly fragmented landscape, we master every facet of consumer engagement, from our Lorealistar community that brings together thousands of influencers worldwide to AI-based innovations that pioneer the way people experience beauty,” he said. “We are continuously growing our share of beauty influence, which stands approximately at 29 percent. And we are building the future of the consumer journey.”
Hieronimus described L’Oréal’s multidivision category conquest.
“We continue to double down on hair care, as the category becomes more sophisticated,” he said, citing an example: “Thanks to our broad-based innovation strategy, our brands are winning in each division — whether Elseve in mass; Kérastase in professional, and Dercos and CeraVe in derma — all are growing well into double-digits.”
Hieronimus said L’Oréal enters the second half of 2026 with confidence, and that it intends to keep its pace.
“In the full year, we expect the global beauty market to grow somewhere between 4.5 percent and 5 percent, and we expect to keep outperforming this market,” Hieronimus said. “So far, July is off to a very good start, and our teams are confident for the rest of the year.”
The reasons are manifold, according to the executive. For one, L’Oréal’s beauty stimulus plan remains in full swing. Skin care will reaffirm its comeback, in part thanks to the rollout of some of the group’s smaller brands. Dr.G, Korea’s number-one skin care brand, will be launched in China and the U.S. in the second half.
“Medik8, a star performer since its acquisition, will start its global expansion,” Hieronimus said. The brand is currently present in only two countries.
“Acquisitions will pull their full weight,” Hieronimus said. “Creed will be consolidated for the whole of the second half, and the brand is currently growing double digits.”
The acquisition of Innovist in India will be consolidated, too.
“North Asia will continue to support growth,” Hieronimus said. “The recovery in China continues, and it’s driven by Luxe, which clearly plays to our strengths. In addition, we expect a return to normal in travel retail Asia over the course of the second half, especially in the fourth quarter.”
He said L’Oréal is more ready than ever to keep winning in the long run.
“First, beauty runs on two engines — dopamine, or pleasure, and health, feel-good and live-well,” Hieronimus said. “Dopamine is beauty as indulgence: a scent you love, a texture you enjoy. Health is beauty as wellness — a quest for longevity and skin rejuvenation. L’Oréal is well-positioned to fire on both engines, and there is no other company that can do that.
“We have decades of olfactory science and texture of innovation to fuel the indulgence of beauty at scale, and our best-in-class R&I drives the extension of beauty into health,” he said.
Hieronimus believes L’Oréal is only scratching the surface of its adjacencies in body care, where consumers are looking for more performant products.
“In the first half, body care grew in double digits across all divisions,” he said.
Hieronimus said L’Oréal’s portfolio keeps becoming ever stronger. The Gucci fragrance and beauty license starts within the group on July 1, 2027, and the transition to that begins this September.
“Gucci is one of the most iconic brands in luxury, and we have an unrivaled track record of turning beauty licenses into success stories,” Hieronimus said. “Prada and Valentino went from less than 100 million to over 700 million euros in sales in just four to six years. YSL is a 3-billion-euro brand in beauty, on a par with fashion, so the potential is huge, given that for Gucci, sales in beauty are only a fraction of [those] in fashion.”
For L’Oréal, AI means accelerated innovation. The group’s R&I has been the most augmented by AI over the last four years. “The number of molecules we have analyzed has increased exponentially,” he said. “This allows us to launch more new products faster every year and to keep outperforming the global beauty market.
“AI also means augmented imagination,” Hieronimus said. L’Oréal creates more than 500,000 pieces of content monthly to drive social-first engagement across its key platforms.
“We were an early adopter of AI, and as with every tech disruption, we quickly accelerated its adoption across the entire organization,” he said. “We are on a roll. Our innovation engine is running at full steam.”