After opening with a decline of nearly 7%, the stock pared some of its losses and was down 3.6% around 11:00 am, with trading volumes still very high, while the CAC was down 0.2% at the same time.

As expected, the world leader in cosmetics reported last night an acceleration in its organic growth in the fourth quarter, but failed to meet the forecasts set by analysts.

On a reported basis, the French beauty giant saw its sales rise by 1.5% to €11.25 billion in the last three months of the year.

But its organic growth—a metric closely watched by investors—came in at exactly 6%, instead of the 6.3% expected by the market or the 7% hoped for by the "unofficial" consensus.

On the results front, operating profit rose by 2.4% to €8.89 billion in 2025, close to the consensus of €8.88 billion, delivering an operating margin of 20.2%, up 20 basis points and slightly better than expected, as consensus was targeting 20.1%.

"The results are of high quality, organic growth is picking up quarter after quarter, and above all, there are clearly encouraging signals in the fourth quarter for dermatological beauty, North America, and Europe," noted Pierre Tegner, analyst at Oddo BHF, this morning.

While the group's performance marks a real acceleration compared to previous quarters—organic growth stands at 4% for the full year 2025—the slowdown in momentum in China and in luxury was disappointing.

In luxury products (Lancôme, Yves Saint Laurent, Aesop, or Maison Margiela), organic growth reached only 4.5% in the fourth quarter, the weakest performance among the group's four main divisions—a disappointment professionals attribute to weak sales in "travel retail" (sales to travelers).

By comparison, analysts had expected growth of 7.3%.

"It is all the more surprising since the division should have benefited from its many recent product launches," lamented Wassachon Udomsilpa, analyst at RBC.

At Oddo, however, it is believed that North Asia was the real disappointment, with organic growth of just 0.6% in the last quarter, compared to 5.6% expected, even though the comparison base was expected to be very favorable.

"This sluggishness is quite consistent with comments made so far by consumer peers, who mention a Chinese market that is improving but remains challenging," noted the private bank.

To these disappointments are added outlooks still considered very vague by professionals.

As usual, the group merely stated it was "optimistic" about the outlook for the global beauty market in 2026, despite macroeconomic uncertainties, and expressed confidence in its ability to continue outperforming it and to deliver another year of revenue and earnings growth.

No specific targets were disclosed.

"Although fourth-quarter organic growth of 6% is, in absolute terms, of good quality, it will probably not be enough to support growth assumptions that had gradually surpassed the 5% mark for 2026," warned Pierre Tegner at Oddo.

For 2026, the market is currently anticipating organic revenue growth of 5%, with EBITDA expected to rise by 5.8%.

The punishment is all the harsher given that the French group's valuation is considered rich at current levels, with a P/E ratio of 28.5x.

"The company is valued at 17.5 times its EBITDA, which is higher than its consumer goods sector rivals such as Unilever (13.5x), Beiersdorf (13x), Nestlé (11x), and Danone (10.5x)," notes Jefferies.

L'Oréal shares, still highly sought after by investors due to their market leadership, broad product range, marketing power, and capacity for innovation, have gained nearly 11% over the past 12 months, far outperforming their benchmarks, the CAC 40 (+2% over the period) and the STOXX® Europe 600 Consumer (-17% in a year).

"When the storm of earnings season passes, it will be clear that these performances still stand among the best in the global large-cap consumer sector, while many players in the industry are currently facing major growth challenges," summarize Bernstein analysts.

By comparison, the recent releases from U.S. groups Estée Lauder and Coty were punished much more severely, with their shares dropping by 19% and 15.5%, respectively, in the wake of their results.