L’Oreal’s Profits Fall
French cosmetics maker L’Oreal appears to be no different from other make up companies, as it posted a 14% fall in profits, as the recession hindered spending on non-essential items. Net income for the 6-month period ending June 30, 2009 fell to EUR 1.08B (US$ 1.5B) from EUR 1.26B a year ago.
L’Oreal, the maker of Armani makeup and Lancome scents stated that the decrease in earnings was primarily the result of shoppers switching to cheaper brands. This in turn affected the company’s operating margin at its luxury division, shrinking 7.7% to 11.9% of total sales.