Following a bigger-than-expected blow to the beauty giant’s travel retail business in Asia, which also impacted its luxury segment, L’Oreal shares dropped to their lowest point since March.

Following the French group’s late-quarter release of third-quarter sales on Thursday, which includes brands including Maybelline and Lancome, the shares opened 3.3% lower. Eventually, the shares gained some ground, and by mid-morning trading, they had only dropped by 0.8%.

Sales of L’Oreal in North Asia fell 4.8% in the third quarter, significantly undershooting forecasts of a 14.4% increase.

Analysts noted that the Chinese government’s tougher regulations on “daigou” resellers—people who purchase goods at reduced costs overseas and resell them at a discount in China—have had a more severe than anticipated negative impact on business.

While investors anticipated deterioration in North Asia due to travel retail issues and the luxury segment, the extent of the loss “took us by surprise,” according to Barclays analysts.

The luxury sector’s downturn was probably anticipated following LVMH’s perfume and cosmetics division’s narrow miss last week, but the market was probably taken aback by the luxury division’s 3.2% growth as opposed to the consensus estimate of 12.2%, according to Jefferies analysts.

The company met overall sales growth estimates with organic sales growth of 11.1%, despite missing expectations for a robust rebound in China, where the market remained muted. Growth in Europe and an acceleration in the US enabled the company reach these forecasts.

“The bottom line to us is that L’Oréal’s strong and diversified beauty portfolio enabled the group to offset pockets of temporary weakness in North Asia in Q3 and still deliver another strong quarter of double-digit Like for like growth,” said Stifel analyst Rogerio Fujimori.

(Adapted from Reuters.com)