L’Oreal sales slightly miss estimates in fourth quarter as China weakness persists

French cosmetics giant L’Oreal on Thursday reported lower-than-expected sales in the fourth quarter amid continued weakness in the Chinese beauty market and a slowdown in demand in the U.S.

The world’s largest beauty brand posted sales of 11.08 billion euros ($11.49 billion) in the three months to December, up 2.5% on a like-for-like basis and just shy of the 11.1 billion euros estimated by analysts in an LSEG poll.

Full-year sales rose 5.1% to 43.48 billion euros versus the 43.33 billion euros forecast.

Fourth-quarter sales increased on a like-for-like basis across all regions except North Asia, which recorded a 3.6% decline, extending a continued slowdown over recent quarters. Sales in North America, meanwhile, rose just 1.4%, down from 5.2% growth in the prior quarter.

Sales also grew across all divisions, led by an acceleration in the dermatological beauty and professional products segments.

In a statement accompanying the results Thursday, CEO Nicolas Hieronimus said the “Chinese ecosystem remained challenging,” but pointed to a broader normalization of the global beauty market following a period of macroeconomic pressures.

“We remain optimistic about the outlook for the global beauty market, and confident in our ability to keep outperforming it and to achieve another year of growth in sales and profit,” he said.

The company, whose brands include Lancôme, Maybelline and Kiehl’s, has been struggling with weaker consumer demand over recent quarters, particularly in the key Chinese market — a trend that has also beset high-end luxury firms.

Last week, investors were underwhelmed by only slightly better-than-expected full-year results from luxury bellwether LVMH. The market had put faith in a sector-wide turnaround after stellar results from Cartier owner Richemont in January, but sustained weakness in LVMH’s fashion and leather goods and wines and spirits segments pointed to further divergence in the sector.

Meanwhile, the prospect of a global trade war is clouding sentiment among consumer goods companies, with fresh U.S. tariffs on Beijing likely to exacerbate spending pressures in the already challenged Chinese market.