L'Oreal 2008 net profit falls 27 percent

[February 17, 2009]  PARIS (AP) -- French cosmetics maker L'Oreal said Monday that annual net profit fell 27 percent after disappointing American holiday sales, although the figures from a year earlier were boosted by a one-off gain.

The maker of Maybelline mascara and Lancome fragrances posted a net profit of euro1.95 billion ($2.49 billion), weighed down by euro115 million of special charges. The results compared to euro2.66 billion in 2007, when L'Oreal made a euro617 gain on the sale of shares in Sanofi-Aventis.

Excluding non-recurrent items, net profit rose to euro2.06 billion from euro2.04 billion in 2007. The company did not break out quarterly or half-yearly profit figures.

"In an environment made very difficult in 2008 by the economic crisis, L'Oreal is proving resilient," Chief Executive Officer Jean-Paul Agon said in a statement.

He gave no outlook for 2009, except to say the company will tackle the year "with realism, confidence and resolve."

L'Oreal shares closed down 1.1 percent at euro52.86 in Paris trading.

Sales rose 2.8 percent in the year to euro17.54 billion ($22.39 billion).

In the fourth quarter, sales rose 4.7 percent to euro4.63 billion. But on a like-for-like basis, revenue fell 0.6 percent dragged down by the luxury goods division.

The company said it noted a "clear deterioration" in North American sales in the fourth quarter, particularly in department stores.

In Europe, strict inventory management by distributors has affected sales, the company said.

[Associated Press]

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