L’Oréal, the major French cosmetics company, stated that the trend of using weight loss drugs is affecting consumer purchasing behavior in beauty products, especially skincare. The company is developing products designed to address sagging skin caused by rapid weight loss, even as its third-quarter sales grew 7.7%, exceeding analyst forecasts.
L’Oréal, the French cosmetics giant, revealed that the rising use of GLP-1 weight loss drugs is influencing consumption patterns for beauty products, particularly skincare, as some users experience sagging skin after rapid weight loss.
Nicolas Hieronimus, CEO of L’Oréal, said the global beauty market remains resilient despite economic challenges, but the phenomenon of GLP-1 drug use is a key factor affecting consumption of beauty products, especially skincare.
GLP-1 drugs, including Ozempic, Wegovy, and Mounjaro, were originally developed to treat certain types of diabetes but have gained popularity for suppressing appetite and reducing body weight. However, rapid weight loss can cause sagging skin in some individuals, including on the face, which is not a direct effect of the drugs themselves.
Hieronimus noted that subsidiary brands SkinCeuticals and Kiehl’s have developed products intended to be used alongside GLP-1 drugs to address skin issues related to rapid weight loss.
Additionally, L’Oréal is expanding into the aesthetic medicine market by increasing its stake in Galderma, a dermatology and medical aesthetics company, to 20% last December. Both companies are testing products for weight loss drug users concerned about sagging skin. Galderma offers products like Sculptra, a collagen-stimulating injectable, and Restylane, a dermal filler.
Meanwhile, L’Oréal reported that sales from July to September rose 7.7% compared to the same period last year, after adjusting for currency and accounting factors, reaching 11.56 billion euros (about 12.95 billion U.S. dollars), surpassing analyst expectations of 5.9% growth.
The company’s luxury goods segment, which generates over one-third of total sales, grew 7% driven by demand for premium perfumes and high-end skincare in China. Sales in Europe increased nearly 9%, while South Asia and the Middle East grew 19.5% due to strong demand in the Gulf countries and Vietnam.
The company also noted that China’s beauty market has begun to recover after two years of contraction, with middle-class consumers increasing spending on premium beauty products, making the beauty sector one of the better-performing markets despite an overall consumer goods slowdown.
Following the earnings announcement, L’Oréal’s stock traded in the U.S. rose 8.3%, while its shares in the French market have increased 11% since the start of the year.