L'Oréal's fourth-quarter sales growth beats forecasts

French cosmetics giant L'Oréal reported on Thursday a better than forecast rise in fourth-quarter sales, helped by the weak euro, solid growth in the United States and Japan and resilient demand for its luxury products.

The Paris-based maker of Lancome face cream and Armani perfume said revenue rose 4.2 percent in the three months to Dec. 31, above analysts' expectations of 3.6 percent.

The group said sales growth was buoyant in Japan and strengthened throughout the year in the United States with luxury brands such as Urban Decay, Kiehl's and Yves Saint Laurent enjoying double-digit growth.

Revenue in the luxury products division was up 6.8 percent on a like-for-like basis, against a rise of 4.2 percent in the previous three months.

The performance was driven in part by best-sellers such as Yves Saint Laurent's Black Opium perfume and tint-in-oil lipstick, while Lancome's La Vie est Belle perfume has become the top seller in Europe.

Operating profit in the full year was up 12.8 percent at 4.39 billion euros (3.5 billion pounds) on revenue of 25.26 billion euros, broadly in line with market forecasts.

"Growth at all divisions beat expectations, except for Body Shop that proved disappointing," Robert Waldschmidt, analyst at Liberum in London.

Comparable sales at Body Shop fell 5.8 percent in the fourth quarter, hit by tough trading in Hong Kong and poor year-end sales in North America.

L'Oréal proposed an increase in the annual dividend by 14.8 percent to 3.10 euros.

Looking to the current year, the company only said its ambition was to outperform the cosmetics market and "achieve another year of sales and profit growth".