L’Oréal saw a 2% sales increase in the first half, driven by professional products and a 30-basis-point rise in operating margins. Despite global consumer challenges, the company’s focus on innovation and digital capabilities positions it well for future growth.

Sales growth across all divisions was fueled by successful product launches like new hair care items and CeraVe extensions. Optimism for the near-term outlook stems from China’s recovering demand and L’Oréal’s ability to gain market share from local competitors.

Shares of L’Oréal rose 4% on July 30, but remain slightly undervalued. The company’s 2025 sales are projected to grow by 5%, driven by increasing demand in key markets and market share gains in various product categories.

L’Oréal is well-prepared to handle a 15% tariff with its global supply chain flexibility. The company may increase US production and raise prices on luxury fragrances to offset the tariff impact, while maintaining production in Europe.

Read more at Morningstar: Innovation Edge Intact, China Recovery Lifts Near-Term Outlook