Despite consumers ignoring price increases, L’Oreal reported a 13% increase in first-quarter revenue, exceeding expectations. However, the company has not yet reaped the rewards of the lifting of COVID-19 limits in China.

Over the first three months to the end of March, sales of the French cosmetics group, which offers brands from Maybelline to Lancome, were 10.38 billion euros ($11.37 billion).

According to a consensus estimate published by Barclays, the 13% gain on an organic basis exceeded experts’ forecasts for 8.1% growth.

The firm reported great results from its consumer products segment, which has been expanding upscale, as well as its dermatological beauty division, which sells CeraVe skincare, as sales in Europe and North America increased by 16% and 16.6%, respectively.

Consumer demand and store traffic in mainland China, where the business said that luxury sales were flat owing to limited supplies, restarted in February.

“These are truly outstanding numbers,” despite China “still being a drag,” said Bruno Monteyne, analyst with Bernstein, noting that sales growth for every division beat expectations, with a standout performance from the dermatological beauty division, up 30.6%.

According to Gerrit Smit, manager of the $1.9 billion Stonehage Fleming Global Best Ideas Equity Fund, an L’Oreal investor, the division’s connections to medical specialists like dermatologists and pharmacists “cement long-term brand loyalty and are extremely powerful in directing consumer choice.”

In a conference call with analysts, L’Oreal Chief Executive Nicolas Hieronimus expressed his confidence that sales at the company’s luxury segment, which increased 6.5%, will accelerate due to a resurgence in China, where it had a market share of over 31%.

While he acknowledged that there was still a chance of recession and inflation, he claimed that “we see blue patches” in the consumer confidence of Americans and Chinese alike.

(Adapted from USNews.com)