L’Oréal Groupe reported 3.6% sales growth for its first quarter of 2026 on Wednesday.
The revenue jump was driven by fragrance, professional hair care and makeup, followed by skin care, L’Oréal Group CEO Nicolas Hieronimus said during the investor call.
“As you could see in our numbers, we’re off to a good start [for 2026],” Hieronimus said. “Our like-for-like growth … between last year and this year was at plus-6.7%, well ahead of the global beauty market, which we estimate to be close to plus 4%.”
L’Oréal’s executive team spent time on the call answering investor questions about the ongoing conflict in the Middle East and the potential impact on consumers and internal P&L in the coming months.
“I’m conscious about the uncertainties that lie around this conflict,” Hieronimus said. “It’s true that, today, as far as the impact it has had on our sales, it was absolutely manageable. … [It has impacted sales in] March in travel retail and, indeed, in the [United Arab] Emirates, but this region, the Middle East, is less than 3% of our sales.”
The ongoing conflict in the Middle East erupted on February 28 when the U.S. and Israel launched targeted airstrikes on Iran. The ongoing conflict has created supply chain disruptions for much of the world due to blockades in the Strait of Hormuz, a shipping path that moves around 20% of the world’s oil.
On L’Oréal’s side, the biggest disruption has been in travel retail and across Dubai’s mega malls, both of which rely heavily on international tourists.
“It will [continue to] have an impact, but it will really depend on how long the conflict lasts, and whether tourists and travelers are confident to go back to this region. But as far as local consumption, it is OK,” Hieronimus said. Local shoppers have gone back to spending in many regions, he said. “Consumption has gone back to normal in Saudi [Arabia], which is an important growth market for us, and as far as the Emirates are concerned, we see that e-commerce is back to, more or less, normal.”
Hieronimus also noted that smaller malls in the region, which mainly serve local residents, have also returned to business as usual. “So overall, this has had an impact in March, and of course, we will see how things evolve in April and May. But we think it’s overall manageable in the region,” he said.
Consumption in the Middle East aside, Hieronimus is closely monitoring economic tailwinds in the U.S. and E.U. “What we don’t know is whether inflation on gas prices will impact consumer behaviors,” he said. “I must say that, so far, and we’re monitoring this very closely; we have seen absolutely no reduction of consumption in our markets, whether it’s Europe [or] North America.”
However, the team did not rule out price increases on L’Oréal products if the conflict continues.
“We have been computing the potential cost linked to the oil [impacted by the Middle East conflict], so as you can imagine, we have an additional cost on the logistics and also direct additional cost potentially on the sourcing of some materials, mainly on plastics,” said Christophe Babule, chief financial officer at L’Oréal Groupe.
By its CFO’s calculations, L’Oréal Groupe could lose between $105 million and $117 million from supply chain price increases caused by the conflict.
“If the oil stays at around 9,200 U.S. dollars a barrel, then the additional impact will be in the range of €90 million to €100 million [$105 million and $117 million],” Babule said. “Of course, all this is being calculated based on the evolution of the prices. … The biggest risk at the end will be the inflation, … and if inflation goes up in the long term, we may have to take some action on the pricing later this year.”
“We’ll see if it lasts, whether we need to do it,” Hieronimus added. “We have this capacity to take prices up, but we have a lot of, I would say, opportunities in what we call revenue growth management, where the articulation of formats, product mixes, … [It is] another way to protect our gross margin without necessarily taking prices up too much for consumers. That’s how we did it post Covid, and that’s one of the tools we use to keep on recruiting consumers while protecting our P&L.”
