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L'Oréal's fiscal Q1 sales boosted by luxury division

A surge in sales of high-priced cosmetics helped L'Oréal SA beat fiscal first-quarter sales estimates, with the company highlighting strong demand for luxury products in Asia.

The French cosmetics giant, owner of brands such as Maybelline and Ralph Lauren fragrances, on April 18 reported revenue of €7.05 billion in the three months to March 31, an increase of 7.5% on the same period a year earlier. The figure beat analysts' consensus estimate of €7.02 billion, according to S&P Capital IQ.

Like-for-like sales, which exclude the impact of acquisitions and currency fluctuations, increased by 4.2%. The company did not release profit figures for the period.

The strong performance was driven by L'Oréal's luxury cosmetics division, especially in Asia, the company said. Like-for-like sales in the unit, which includes the brands Lancôme and Giorgio Armani beauty, increased by 12.2%. However, sales in the consumer products division, home of Garnier shampoo and L'Oréal makeup, increased by just 1.4% — down from growth of 4.2% in the previous quarter.

"In an environment that remains volatile, our well-balanced business model is now more than ever an asset. We are confident in our ability to achieve another year of sales and profit growth in 2017," Jean-Paul Agon, L'Oréal's chairman and CEO, said in a statement.

L'Oréal said The Body Shop, its ethically focused beauty brand, recorded a decline in sales of 1.4%. L'Oréal said on Feb. 9 it was considering a sale of the retailer, which it bought for £652 million in 2006, to "give it the best opportunities and full ability to continue its development."