L’Oréal Group, the largest beauty conglomerate in the world based on revenue, reported 6% growth for the first nine months of 2024 during an investor call on Tuesday.
The beauty conglomerate behind prestige and mass brands like Lancôme and Maybelline shared growth and areas of concern while highlighting science-backed skin care’s continued popularity among global shoppers.
Whereas some areas of the business, like sales in China and the sun-care category, tumbled during L’Oréal Group’s Q3 ending September 30, hair care, fragrance and dermatological skin care were bright spots.
Dermatological beauty — a growing category, which consists of products developed with dermatologists, with science-backed ingredients and through clinical testing — advanced 11.3% like-for-like with 9.8% reported growth, according to L’Oreal Group CEO Nicolas Hieronimus.
According to Hieronimus, La Roche-Posay led category growth thanks to the brand’s successful launch of Mela B3, a pigmentation-focused product with a multi-patented molecule called Melasyl. SkinCeuticals also accelerated its growth, thanks to the brand’s new P-Tiox serum, a peptide blend marketed to consumers to replace neurotoxin injections like Botox and Dysport. CeraVe also outpaced the market across all regions, Hieronimus said, with more than half the sales coming from outside the U.S. for the first time.
Still, dermatological beauty numbers fell lower than in previous quarters. “[The dermatological skin-care category] is lower than the previous quarters, without a shadow of a doubt,” Hieronimus said on the call. “The biggest culprit of the slowdown of dermatological cosmetics is the U.S … [is] mostly young Gen Z that went to try a few other brands. … So it’s up to us to recruit them [back].”
He credited the slowdown to competition for American Gen-Z consumers, inclement weather that impacted the sun category, a lack of newness, and ongoing turmoil among American drugstore chains. For example, after falling short on revenue goals, CVS recently appointed a new CEO, and Walgreens announced that it will shutter 1,200 locations within the next three years.
“In particular, we haven’t had innovations for a while, which is changing now,” Hieronimus said. He teased two innovations on which the group is betting big: a urea-focused body-care line and anti-dandruff shampoo, both of which will be released this quarter.
It is part of a larger strategy toward science-backed dermatological beauty. For example, in August, L’Oréal Group acquired a 10% stake in Swiss pharmaceutical company Galderma for a non-disclosed amount. Galderma owns OTC lines like Cetaphil and Differin, as well as in-office injectables like Dysport and dermal fillers like Restylane. L’Oréal and Galderma will begin a strategic scientific partnership to expand the category.
According to Coherent Market Insights company, the dermocosmetics skin care category could surpass $98.33 billion by 2031 thanks to an 8.1% compound annual growth rate.
