Core Viewpoint - Jefferies downgraded L'Oréal's rating from "Hold" to "Underperform" and reduced the target price from €371 to €340 [1] Summary by Category - **Rating Change** - Jefferies has changed L'Oréal's rating from "Hold" to "Underperform" [1] - **Target Price Adjustment** - The target price for L'Oréal has been lowered from €371 to €340 [1]

Core Viewpoint - The passing of Giorgio Armani has set a clear path for the future of his fashion empire, with a detailed succession plan outlined in his will, prioritizing LVMH, L'Oréal, and EssilorLuxottica as potential buyers for the company [1][2]. Group 1: Succession Plan - Armani's will specifies a phased sale of the company, starting with an initial 15% stake to one of the three preferred buyers, followed by an additional 30% to 54.9% within five years [1][2]. - If the phased sale does not materialize, the company should consider going public as an alternative [2]. Group 2: Potential Buyers - LVMH's CEO, Arnault, expressed strong interest in acquiring Armani, highlighting the brand's significance in the luxury fashion sector [3]. - L'Oréal stated it feels honored to be considered for the acquisition and will carefully evaluate the opportunity, having had a licensing agreement with Armani since 1988 [3]. - EssilorLuxottica expressed pride in being considered and will assess the potential investment through its board [3]. Group 3: Internal Transition - Leo Dell'Orco, responsible for the men's wear style office, will play a key role in future decisions, holding 30% of the company shares and 40% of the voting rights [4]. - Other heirs include Roberta Armani, Silvana Armani, Andrea Camerana, and Rosanna Camerana, with the Giorgio Armani Foundation tasked with selecting a new CEO [5]. Group 4: Challenges Ahead - The new leadership and potential owners will face challenges as the company has experienced stagnant growth, with revenues around €2.4 billion due to declining demand for formal wear among younger consumers and a general slowdown in the luxury goods sector [6].

Giorgio Armani names LVMH, EssilorLuxottica and L’Oreal as preferred buyers for a stake in the company, according to a copy of the designer’s will that was opened on Friday https://t.co/W9bp3zfTln ...

Core Insights - The article discusses the transformation of the Human Resources (HR) function at L'Oréal under the leadership of Stephanie Kramer, emphasizing the shift from a traditional HR role to a strategic partner within the organization [1][7] - Kramer highlights the importance of effective communication and employee engagement in enhancing the HR function and attracting talent [1][2] Group 1: HR Transformation - L'Oréal's HR department has evolved from merely a personnel function to a strategic partner that empowers employees to take control of their career paths [1][7] - The company has implemented a new benefits program designed based on employee feedback, showcasing a proactive approach to HR management [2] Group 2: Communication Strategies - Kramer emphasizes the need for clear communication regarding the resources and support available to employees, which is crucial for building a strong company culture [1][5] - Annual employee meetings and monthly "salon" events have been established to maintain consistent communication and engagement among employees [5] Group 3: Talent Attraction - L'Oréal's Brandstorm competition invites young talent to submit innovative ideas, demonstrating the company's commitment to attracting potential candidates and showcasing its innovative culture [2] - The recent BeautyV3rse conference in New York served as another platform for L'Oréal to display its creativity and engage with external audiences [2] Group 4: Market Insights - Kramer introduces the concept of the "magic triangle," which represents the interconnectedness of HR, hiring managers, and employees, highlighting the importance of independent relationships among these parties [6] - The article notes the shift from a VUCA (Volatility, Uncertainty, Complexity, Ambiguity) world to a BANI (Brittle, Anxious, Non-linear, Incomprehensible) world, presenting new challenges for HR leaders [6][7]

Group 1 - The core viewpoint is that despite ongoing consumer weakness impacting comparable sales, L'Oréal S.A. continues to demonstrate positive revenue growth and has several admirable qualities [1] - The company is recognized for its long-term investment potential, particularly for investors seeking stocks that can sustainably deliver high-quality earnings [1] Group 2 - L'Oréal S.A. is categorized as a French cosmetics giant, indicating its significant presence and influence in the global cosmetics industry [1]

Core Viewpoint - The article discusses L'Oréal's commitment to sustainable packaging practices, focusing on reducing plastic use, increasing the use of recycled materials, and establishing a comprehensive recycling system to combat plastic pollution [1][4]. Group 1: Source Reduction Strategies - L'Oréal emphasizes the importance of reducing packaging strength to achieve source reduction, successfully decreasing the plastic used in a 200ml shampoo bottle from 22 grams to 16 grams through innovative design [2]. - The company employs three main strategies: redesigning packaging to optimize material use, offering larger product sizes to reduce packaging per unit, and promoting refillable options, which have seen a 17-fold increase in the past five years [2][3]. - The "芯动就行" initiative highlights that a 100ml refill can reduce glass usage by 73%, plastic by 66%, and cardboard by 61% compared to two 50ml bottles [2]. Group 2: Use of Recycled Materials - L'Oréal is actively promoting the use of recycled or bio-based materials in its plastic packaging, aiming to phase out virgin fossil-based plastics [3]. - The company requires that recycled plastic suppliers meet food-grade standards to ensure quality, with many products now made from 100% recycled PET [3]. - Collaborations with companies like Carbios aim to develop innovative recycling technologies for unlimited recycling of colored, transparent, and multi-layer PET [3]. Group 3: Comprehensive Recycling System - L'Oréal recognizes that the lack of a complete recycling system is a major contributor to plastic pollution, thus integrating recyclability into product design from the outset [4]. - The company collaborates with local suppliers to develop fully recyclable packaging solutions, such as replacing metal springs with plastic alternatives [4]. - Initiatives like partnerships with recycling platforms and the introduction of eco-friendly product labels aim to enhance recycling convenience for consumers [4].

Core Insights - L'Oréal has launched a new perfume line called "Miutine" in collaboration with Miu Miu, reflecting a blend of high fashion and youthful spirit [1] - The perfume is priced competitively with other high-end brands, with a 30ml bottle costing 890 yuan and a 100ml bottle priced at 1650 yuan [1] - Miu Miu, a luxury brand under the Prada Group, has seen significant growth, achieving a 93.2% increase in sales last year [1] Group 1: L'Oréal's Performance - L'Oréal's sales growth has slowed, particularly in the Chinese market, with a 3% increase in sales to 22.473 billion euros in the first half of the year [2] - The company's operating profit also grew by 3.1%, reaching 4.74 billion euros [2] - The luxury cosmetics division's sales increased by 2%, but there was a 1.9% decline in the second quarter [2] Group 2: Fragrance Business Growth - L'Oréal's fragrance business has emerged as a new growth engine, with an 11% increase in sales in the first half of the year [2][3] - The company plans to accelerate its fragrance portfolio, with new launches including a men's perfume from Prada later this year [3] - L'Oréal has made several investments in fragrance brands, including acquiring stakes in luxury brands and signing exclusive beauty collaboration agreements [3]

Core Viewpoint - L'Oréal has launched a new perfume line "Miutine" in collaboration with Miu Miu, reflecting a strategic move to enhance its fragrance business amidst slowing growth in other segments [2][3][4]. Group 1: Product Launch and Design - The "Miutine" perfume series combines the brand name "Miu Miu" with the French word "Mutine," meaning rebellious [2]. - The bottle design features Miu Miu's signature matelassé leather pleating, paired with a stylish azzurro blue box, showcasing a blend of high fashion and youthful energy [2][3]. - Pricing for "Miutine" is set at 890 yuan for 30ml and 1650 yuan for 100ml, comparable to other high-end perfumes like Chanel [3]. Group 2: Market Performance and Growth - Miu Miu has seen a remarkable sales growth of 93.2% in 2024, making it a hot brand in the luxury sector [3]. - L'Oréal's overall sales growth is slowing, particularly in the Chinese market, where sales in the North Asia region declined by 1.1% to 53.927 billion euros in the first half of 2025 [4]. - Despite the slowdown, L'Oréal's fragrance business has become a new growth engine, with a 11% increase in sales during the first half of the year [4]. Group 3: Strategic Investments and Future Plans - L'Oréal plans to accelerate its fragrance business, with upcoming launches including a men's perfume from Prada [5]. - The company has made several strategic investments in the fragrance sector, including acquiring stakes in luxury brands like Amouage and Jacquemus, and investing in the Korean brand Borntostandout [5]. - Experts suggest that L'Oréal's focus on high-end fragrances is a necessary strategy as its skincare and makeup segments reach maturity [5].

Investment Rating - The report maintains a "Positive" investment rating for international cosmetics and medical beauty companies [2]. Core Insights - The global beauty market is projected to grow at a rate of 4.5% in 2024, down from 8% in 2023, indicating a slowdown in growth [3][12]. - The European market outperformed the global average with a year-on-year growth of 7.5%, while the North Asia market saw a decline of 2% [3][12]. - Major international brands are facing challenges in the Chinese market, with a significant reliance on tourism retail channels, which have been underperforming [3][19]. - L'Oréal reported a 3% recovery in its Chinese market in Q2, while Estee Lauder and Shiseido continue to struggle with declining revenues [3][19]. Summary by Sections 1. Global Beauty Market Trends - The beauty market has shown a stable trend in 2024, with regional disparities in performance. The European market is robust, while North Asia is lagging [3][12]. - The overall performance of international groups is declining, with L'Oréal's growth slowing down [3][15]. 2. L'Oréal Performance - L'Oréal achieved a 3% growth in its Chinese market in Q2, despite ongoing challenges in tourism retail [3][19]. - The company's overall revenue growth for 25H1 was 1.6%, with a notable increase in operating profit by 3.1% [26][29]. 3. Estee Lauder Performance - Estee Lauder's revenue declined by 10.9% in 25H1, with the company facing significant operational challenges [3][44]. - The company has been undergoing a strategic restructuring to address its declining performance [44][48]. 4. Shiseido Performance - Shiseido's revenue fell by 7.6% in 25H1, with a focus on its ELIXIR brand for growth [3][44]. - The company is experiencing a K-shaped recovery, with some brands performing well while others struggle [3][44]. 5. Investment Recommendations - The report suggests focusing on companies with strong growth potential, such as Up Beauty and Maogeping, as well as established brands like Proya and Marubi [4][5]. - In the medical beauty sector, recommendations include Aimeike and Langzi [4].

Group 1: Consumer Trust and Brand Management - The trust and affection of consumers are invaluable market resources for consumer-facing companies, reflecting their brand building and emergency strategies [1] - The increasing integration of consumer brands with operational processes highlights the importance of effective management in response to public events and shifts in public opinion [1] - A quantitative scoring mechanism has been developed to evaluate companies' responses to public sentiment, focusing on management, response, event handling, and brand impact [1] Group 2: Incident Analysis - La Roche-Posay - La Roche-Posay's thermal water spray was criticized on social media for being perceived as overpriced, with claims that its only ingredient is water [2][3] - The company responded by clarifying that the water is not ordinary but sourced from a natural thermal spring in France, processed to retain minerals, and that the pricing reflects production costs [3] - The controversy reflects a broader trend of consumers valuing ingredient transparency and rationality in the cosmetics market, with La Roche-Posay's pricing being significantly higher than competitors [3][4] Group 3: Incident Analysis - Sam's Club - A product sold at Sam's Club faced scrutiny for inconsistent packaging labels, leading to a formal investigation by local market regulators [6][7] - Walmart, the parent company, emphasized its commitment to compliance and stated that the product's labeling had passed local regulatory checks [7] - The incident highlights a failure in management practices and a disregard for consumer rights, potentially damaging the brand's image and trust [8]