(Bloomberg) -- L’Oréal SA reported sluggish sales growth in the second quarter as the world’s biggest maker of beauty products suffered from weakness in China.
Sales rose 5.3% on a like-for-like basis, L’Oréal SA said Tuesday, less than the 6% gain expected by analysts. Growth at the French company’s dermatological unit, which includes brands such as La Roche-Posay and CeraVe, came in especially far below estimates.
The beauty market declined in mainland China due to a tough comparison with a year earlier and weak consumer confidence, L’Oréal said. Sales in North Asia, the region that includes China, fell by 2.4% in the three months ended in June, worse than estimates. That marks the fourth straight quarter of falling sales in the region, which accounts for about a quarter of L’Oreal’s revenue.
L’Oréal’s American depositary receipts fell as much as 2.8% in New York trading. The company’s Paris-listed shares have declined 13% this year through Tuesday’s close.
L’Oréal, which greatly expanded its Chinese business over the past two decades, had warned last month that the beauty market overall would grow less than it had expected earlier this year.
European companies across a range of sectors are taking a hit from China’s slowdown, with makers of consumer goods especially affected. LVMH, Hugo Boss AG and Burberry Group Plc are among the high-profile names whose performance has been hurt.
(Updates with ADRs, North Asia decline)
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