Photo: Evil Erin via flickr
L’oreal is having a bad hair day.Shares are down over 4% after its fourth-quarter sales and margins came in below expectations.
Both UBS and Deutsche Bank downgraded the stock because
- The company is seeing slowdowns in Like-for-like sales growth, which is key to valuation
- Sales were up 4.1% for the fourth quarter below a forecast of 5.3%.
- Rivals Estee Lauder and Elizabeth Arden both came in above analyst expectations and raised their full-year forecasts
This week’s departure of L’Oreal Chairman Lindsay Owen-Jones may be a sign that the company is buying a direct sales company which would help decrease costs and expand into other markets.
Owen-Jones was always against direct sales but his successor Jean-Paul Agon has not taken a firm stance yet and his advisors say he is open to discussions.
Foreign expansion would help with the company’s goal to bring on 1 billion new customers over the next 10 years in more emerging markets.
Estee Lauder and Elizabeth Arden have strong operations in both China and Russia.