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L'Oréal H1 EPS beats expectations, revenue misses

Paris-based L'Oréal SA's first-half net profit and EPS beat expectations as the company vowed to generate "significant" like-for-like sales growth and growth profits in fiscal 2018.

The cosmetics company reported diluted EPS of continuing operations, excluding nonrecurring items, of €4.08 for the six months ended June 30, coming in higher than the S&P Capital IQ normalized consensus estimate of $3.92.

Net profit excluding nonrecurring items for the first half reached €2.30 billion, up 5.2% from the €2.19 billion it reported the year before. The S&P Capital IQ consensus estimate for net profit excluding nonrecurring items was $2.2 billion.

Revenue for the first six months of 2018 was down 0.2% from the year-ago period to €13.39 billion but increased 6.6% on a like-for-like basis. That figure fell shy of S&P Capital IQ consensus estimate of €13.42 billion.

L'Oreal said revenue for the second quarter rose 0.7% on the year to reach €6.61 billion.

L'Oreal Chairman and CEO Jean-Paul Agon said the consumer products division registered "moderate growth" and was "held back by an environment that is very difficult in some markets." The company said second-quarter sales in the Asia Pacific region grew 16.8%.

Agon also noted that North America is improving, while Western Europe is affected by "persistent difficulties in France, and by the slowdown in the United Kingdom."

"The good sales growth and the quality of the first-half results reinforce our confidence in our ability to once again outperform the cosmetics market in 2018, and to achieve significant like-for-like sales growth and an increase in our profitability," Agon said.