$OR (+0,32 %) Today, the company presented its new quarterly results for the third quarter of 2026. It was able to exceed expectations, in some cases quite significantly. Adjusted comparable revenue growth accelerated to 7.7%, exceeding the expected 5.9%. For me, however, it’s not just the results that matter, but above all what they say about the quality and sustainability of the growth.
Today, I’d like to revisit the “watchouts” I mentioned earlier:
- Organic growth: With +7.7% adjusted comparable growth, $OR (+0,32 %) a clear acceleration compared to Q2. Growth was driven by both volume and product mix. This suggests that the trend is not based solely on price increases.
- China: There is an important positive signal here. L’Oréal Luxe grew in the low double digits in China. Growth in North Asia also accelerated significantly. This points to a recovery in the important luxury and beauty market. Nevertheless, I wouldn’t yet call this a sustainable turnaround. The key question remains whether demand will remain stable over several quarters and is not merely driven by a short-term recovery or individual product categories.
- Margins: No separate operating margins were reported for the third quarter.
- Segments: Growth is encouragingly broad-based, but differences remain significant:
- Professional Products: +13.9%—driven particularly strongly by premium hair care.
- Dermatological Beauty: +13.9% – continues to be a key growth driver with brands such as La Roche-Posay and CeraVe.
- L’Oréal Luxe: +7.0% – Acceleration, driven in particular by fragrances and the recovery in China.
- Consumer Products: +3.8% – solid, but significantly slower than the other segments.
- Assessment: Operationally, this is $OR (+0,32 %) exactly the kind of performance I’d like to see from a high-quality, long-term company. The issue for me remains the entry price. The positive results have caused the stock to rise significantly. Thus, the crucial question is no longer just whether $OR (+0,32 %) it is a strong company, but whether the current price offers sufficient return potential for the coming years.
Other points I consider important:
- E-commerce: Growing by about 17%, which is significantly faster than the overall market. This strengthens an important sales channel and shows that $OR (+0,32 %) it can position its brands well in the digital space as well.
- Mexico: There, temporary supply chain issues and inventory adjustments in the retail sector weighed on the consumer products business. This currently appears to be more of an operational issue than a structural downturn, but it should be monitored.
- Acquisition: In addition, $OR (+0,32 %) a majority stake in Innovist, a digitally focused Indian personal care brand platform. This aligns with the strategy of attracting new consumers in high-growth markets. The key question will be whether such acquisitions create additional value in the long term.
My conclusion: $OR (+0,32 %) delivers a convincing quarter. Accelerated organic growth, a noticeable recovery in China, and strong contributions from Dermatological Beauty and Professional Products. The trend in e-commerce is also positive.
My watchouts are therefore mostly positive. I’m still waiting for confirmation on margins for the third quarter, and the valuation remains my biggest concern. $OR (+0,32 %)
It remains on my watchlist. However, I currently don’t see sufficient reason to abandon my valuation discipline. I’d like to hold the company in my portfolio for the long term, but not at any price.
What do you think? Is the accelerated growth already a reason for you to view the valuation more generously, or are you also waiting for a more attractive entry price?
~ Not investment advice ~
