L’Oreal changes forecast after disappointing third-quarter results
CLICHY, France Cosmetics maker L’Oreal reduced sales and profit forecasts for the third time in four months—once in July, once in August—and is preparing for a tough upcoming year. Third-quarter sales rose 3.4 percent to 4.27 billion euros, while Eastern Europe showed a 30 percent; Asia, a 14 percent increase; Latin America, a 6.9 percent increase; and Western Europe a 3.9 increase.
“Since September, we have noted a clear slowdown in some markets in western Europe and North America, and have been confronted with a contraction of purchasing by some distributors in the current economic crisis,” said chief executive officer Jean-Paul Agon in a statement. “[L’Oreal] distributors in the United States and some European countries are being very cautious and are reducing inventories.”
The company predicted in August “close to a 6 percent” rise in organic revenue and are now saying approximately 4 percent for the year. Organic sales are already slowing, showing an increase of 2.7 percent this quarter, compared with a 5.1 percent increase in the second quarter.
L’Oreal is the third major cosmetics to cut its predictions in three days. Estee Lauder Cos. announced their changed forecast Tuesday, and Avon Products Inc. lowered their forecast Thursday.
P&G names Moeller to leadership team as CFO
CINCINNATI Procter & Gamble has announced that Jon Moeller, current vice president and treasurer, will become the new chief financial officer, effective Jan. 1, 2009.
Moeller succeeds Clayton C. Daley Jr., vice chairman and chief financial officer, who will retire Sept. 16, 2009, after 35 years of service. He will step down as chief financial officer on Jan. 1, but will continue to serve as an advisor to chairman and chief financial officer A.G. Lafley.
“Jon Moeller has been an integral part of P&G’s leadership team for nearly a decade. He brings strategic leadership, tough-minded discipline, and a 20-year track record of strong business and financial results,” stated Lafley.
Moeller, who has worked in nearly every part of the P&G business from laundry and cleaning in China to beauty and health globally, has led major merger and acquisition operations, including the Wella acquisition and recent divestiture of Folgers.
L’Oreal may cut 200 jobs at U.K. factory, transfer operations to Fareva
PARIS French beauty company L’Oreal is looking to cut 200 jobs at one of its U.K. factories, according to published reports.
The plant, located in Talbot Green, South Wales, makes shampoos, conditioners and hair styling products. However, L’Oreal is looking to transfer those manufacturing operations to France-based company Fareva around the middle of next year, according to reports.
Production for the U.K. market would remain in Talbot Green to keep some of the jobs at the factory.
A decline in the U.K. supplier base has meant 70 percent of its ingredients were imported. Also, more than two-thirds of its current product is then exported.
“The combination of these two factors means that the factory is no longer sustainable from an economic logistical or environmental perspective within L’Oreal’s manufacturing organization,” a company spokesman was quoted as saying.
According to reports, those employees whose jobs have become redundant will be offered help in finding new positions within the L’Oreal Group or elsewhere.