237.77 hundred million euros (approximately 1880 hundred million yuan) in sales, a year-on-year increase of 5.8%; adjusted organic growth of 6.5%, outpacing the global beauty market average growth rate. This is L'Oréal's performance in the first half of 2026.
In terms of profitability, L'Oréal's operating profit in the first half reached 50.63 hundred million euros (approximately 400 hundred million yuan), a year-on-year increase of 6.8%, an increase of 3.23 hundred million euros (approximately 25.5 hundred million yuan), with growth rate higher than sales; operating margin climbed to 21.3%, up 20 basis points year-on-year, the highest level for the same period in history.
This profit level was not achieved by cutting expenses. In the first half, L'Oréal's investment in brand building and advertising marketing accounted for 32.6% of sales, an increase of 70 basis points year-on-year. Brand investment increased, yet profit margin rose instead. The most thought-provoking contradiction in this financial report lies precisely here.
In the first half, L'Oréal's advertising and promotion expenses were 77.42 hundred million euros (approximately 612 hundred million yuan), accounting for 32.6% of sales, an increase of 70 basis points year-on-year, spending about 5.7 hundred million euros (approximately 45 hundred million yuan) more. At the same time, operating margin rose against the trend by 20 basis points to 21.3%, a record high for the same period.
Spent nearly 6 hundred million euros more on brands, yet profit margin was higher. How was this achieved? Breaking down the income statement, the answer lies in three layers.
The first layer is gross margin.
Gross margin increased by 10 basis points to 74.8% in the first half. This is the result of the dual drive of "volume and value", selling more products and also selling a higher-value product mix. High-end hair care in the Professional Products Division, efficacy skincare in the Dermatological Beauty Division, and fragrances in the L'Oréal Luxe Division are all pushing average selling prices upward. Improved pricing power provides thicker profit space for marketing investment.
The second layer is expense control.
While brand investment increased, selling, general and administrative expenses (SG&A) decreased by 70 basis points to 18.0% of sales. The global sales volume of 237 hundred million euros diluted fixed costs, and the increase in e-commerce share also optimized the channel expense structure. The saved space exactly offset the increase in brand investment.
The third layer is the logic of the reinvestment cycle.
The 70 basis points saved from SG&A were not all converted into retained profit, but were reinvested into brand building. Efficiency improvement releases resources, resource investment drives growth, growth expands economies of scale, and economies of scale in turn feed back efficiency. This positive cycle turns brand investment from a profit deduction into a growth multiplier.
The essence of L'Oréal's record-high profit margin is not that less money was spent, but that the efficiency of spending was higher. In an industry environment where customer acquisition costs continue to rise, this capability has more moat significance than pure sales growth.
"Growth is driven by two engines: seamless execution of the innovation strategy and better-than-expected growth in e-commerce, the industry's most active channel." This statement by CEO Nicolas Hieronimus summarizes L'Oréal's growth logic in the first half. When implemented across the four business divisions, it presents an offensive posture with different emphases.
The Professional Products Division was the biggest dark horse in the first half, with adjusted organic growth as high as 11.6%.
The core driving force of this growth rate is that it has hit two major consumption trends: premiumization and efficacy. Consumers are paying a premium for scalp anti-aging and hair repair, just as they do for facial skincare.
Kérastase and Redken's high-end hair care series continue to sell well. New products such as Kérastase "Gloss Absolu Crème" and Redken "Acidic Grow Full" repair essence essentially use skincare logic for hair care, upgrading washing and care from cleansing to efficacy management.
Even against the backdrop of overall pressure on the hair color market, Redken's "Shades ALK" and other integrated color and care solutions still bucked the trend and drove salon traffic. The division's operating margin increased by 90 basis points to 23.3%, the largest improvement among the four divisions.
The Dermatological Beauty Division followed closely with a growth rate of 10.6%, and growth has accelerated for three consecutive quarters.
Efficacy is the most natural moat for this division. La Roche-Posay and CeraVe, backed by dermatologist recommendation systems, occupy a high ground of trust amid the trend of ingredient and formula transparency.
The growth password lies in scenario segmentation: La Roche-Posay B5 repair series meets the rigid needs of sensitive skin and post-medical aesthetic repair, and "Hyalu B5 Suractivated" serum enters the high-efficiency anti-aging track; CeraVe sunscreen products hit the demand curve of "high protection anti-UV", combining sun protection and repair. The division's operating margin is as high as 28.4%, firmly ranking first among the four divisions.
The L'Oréal Luxe Division achieved adjusted organic growth of 5.1%, outpacing the global selective beauty market by nearly double.
The explosion of the fragrance category is key. YSL "Libre" has become the world's number one women's fragrance, and Prada "Paradigme" quickly became a new hit. Fragrance is shifting from a holiday gift option to a daily emotional consumer product, driven by consumers' expanding demand for personal expression and ritual.
On the skincare side, Helena Rubinstein's "Replasty" series and the newly acquired Medik8 represent another trend: high-end anti-aging is moving from surface moisturizing to deep cellular-level repair. The division's operating margin fell slightly from 22.3% to 22.1%, possibly related to integration investment in brands under Kering Group.
The Consumer Products Division moved forward steadily with a growth rate of 4.3%, and showed an accelerating trend in the first and second quarters.
Under the global consumption downgrading trend, the mass market is not synonymous with downgrading, but the main battlefield for cost-effective efficacy. L'Oréal Paris "Elvive Collagen Lifter" series introduces collagen, an efficacy ingredient, into the hair care field; Maybelline and NYX Professional Makeup expand from color cosmetics to body care and fragrance categories, entering all-scenario beauty at mass-market prices. The division's operating margin increased slightly by 20 basis points to 22.7%, maintaining stable profit output on the largest scale.
If innovation determines what to sell, then e-commerce determines where to sell.
In the first half of the year, L'Oréal's e-commerce channel maintained double-digit growth, with a growth rate close to twice the market average. In North Asia, e-commerce already accounts for half of regional sales; in SAPMENA-SSA (South Asia Pacific, Middle East, North Africa, and Sub-Saharan Africa) and Latin America, e-commerce is also a core channel for reaching new consumer groups.
E-commerce is not only a channel but also an entry point for data. The rapid feedback on new products on e-commerce platforms can help brands adjust strategies within a few weeks, an efficiency unimaginable in the traditional shelf era.
Innovation and e-commerce, one solves why to buy, the other solves where to buy. When L'Oréal hits the trends of efficacy, premiumization, and scenario segmentation on the product side, and then reaches consumers at a faster speed through e-commerce channels, this combination explains how it outperformed the market in the first half of the year.
L'Oréal's first-half regional scorecard: North Asia adjusted organic growth 4.6%, growth rate accelerated for two consecutive quarters; SAPMENA-SSA leads with 13.8%; North America grew 6.7%, Europe grew 6.1%, Latin America grew 5.2%.
The most noteworthy is North Asia. The core engine driving the recovery of this region is the Chinese market, where L'Oréal's growth rate is close to three times that of the overall beauty market.
This excess growth comes from three support points: the Luxury Products Division captures high-end anti-aging demand with innovative products such as Helena Rubinstein's "Replasty" series; during the 618 promotion period, the e-commerce channel consolidates its advantage; the Chinese local brand Yu Sai performed brilliantly, confirming the effectiveness of the multi-brand portfolio strategy.
Apart from mainland China, the Dermatological Beauty and Professional Products divisions both achieved mid-double-digit growth in North Asia, with brands such as La Roche-Posay, CeraVe, and Kérastase continuing to consolidate their positions in their respective tracks. The e-commerce sales share in North Asia has exceeded 50%, the highest among all major regions globally.
The Japanese market was flat due to the decline in tourism consumption, while South Korea remained stable; although travel retail is still dragged by the pace of consumption recovery in mainland China, L'Oréal's performance in this channel has outperformed the market.
If the first-half performance validated L'Oréal's execution of its existing strategy, then several major moves disclosed in the financial report point to the company's growth direction for the next five to ten years.
● The most significant news is undoubtedly the Gucci beauty license.
L'Oréal signed a global exclusive license agreement with Kering for a period of 50 years, starting from 2027 year 7 month 1 day, L'Oréal will be fully responsible for the research and development, production, and distribution of Gucci brand beauty products.
A license term of 50 years is quite rare in commercial contracts, usually such agreements are between 5 and 10 years, which also reflects the intention of both parties for long-term cooperation. Gucci has deep brand assets in the fragrance field, and L'Oréal has accumulated mature experience in high-end fragrance operations through brands such as YSL and Valentino.
More importantly, brands under Kering such as Creed, Bottega Veneta, and Balenciaga, which were integrated into the L'Oréal system in 4 month this year, are currently "off to a good start," providing a reference path for Gucci's transition.
● Another noteworthy signal is the cooperation with OpenAI.
The two parties will focus on agentic commerce, that is, AI agents completing the entire process from demand identification, product recommendation to purchase decision. L'Oréal lists it as a strategic-level cooperation, indicating its judgment on the next generation of beauty retail: the competitive focus will shift from shelves to algorithms.
● In terms of layout in emerging markets, L'Oréal chose the path of "localized acquisition."
Acquiring a majority stake in the Indian personal care brand Innovist strengthens L'Oréal's localized brand matrix in the Indian market. For a market with a young demographic structure and huge consumption upgrade space, international brands alone are not enough; having brands that truly understand local needs is the key to long-term competition.
From Gucci to OpenAI to Innovist, the three transactions point to three directions: continued penetration of high-end fragrances, AI reshaping retail logic, and localized deep cultivation in emerging markets.
The first-half sales of 237 hundred million euros and an operating margin of 21.3% validate L'Oréal's operational capability in the current cycle: not relying on cutting investment to protect profits, but driving growth with higher spending efficiency. The Gucci license, AI cooperation, and emerging market acquisitions outline the growth profile of the company's next stage.
The CEO's statement in the financial report, "L'Oréal is truly one of a kind," at first glance is a self-positioning, but upon closer inspection, the evidence provided in this financial report is indeed substantial.