L’Oreal’s chief digital officer explains how the quick adoption of e-commerce saved the company’s 2020 earnings

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Lubomira Rochet speaks onstage during the Youtube session at the Cannes Lions Festival 2018 on June 19, 2018 in Cannes, France.

As vaccination programs across the globe begin to bite into the spread of Covid-19, retail businesses are starting to think about how they’re going to welcome back customers who have saved cash during the last year’s crisis.

One of the sectors looking for a new path out of the crisis is the cosmetics industry. While some sectors – like medicine, household cleaners and soap, and vitamins and supplements all saw increases in purchases during the pandemic, according to JP Morgan, the world cut back on cosmetics.

There are several reasons for this: as nationwide lockdowns have disrupted normal life, many people have been spending less time in front of others, and when they do, masks have made it impracticle to spend the same amount of time on facial cosmetics. Another reason is that the cosmetics industry traditionally relies on tangible, in-person sales. This is why staffed cosmetics counters are a staple of many department stores.

L’Oreal is one of the largest cosmetics companies in the world, and Lubomira Rochet – who made Insider’s list of 100 people transforming business in Europe last year – has been tasked with navigating the firm through the pandemic. Rochet is the firm’s chief digital officer, and based on widespread industry trends, the last 12 months should have been a sure-fire path to decreased profits for the company. Yet L’Oreal’s full-year financial results for 2020, published in late February, saw things staying steady.

“L’Oréal has traversed this crisis in the best possible condition and has even grown stronger,” Jean-Paul Agon, the company’s chairman and CEO, said when revealing the results. The reason? L’Oreal’s forward-looking bet on e-commerce sales. “Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale,” added Agon. In all, e-commerce sales rose at L’Oreal by 62% in 2020, and accounted for one dollar in every four spent with the company.

The bumper results are the payoff for a decade of work. “The matter of fact is L’Oreal started its transformation 10 years ago which served us well when covid hit, because we were ready,” Rochet told Insider in mid-2020. The digitialization of the operating model for the company was crucial to making sure the firm managed to weather the crisis, but it was also one that Rochet had seen as a key area long before that.

“We spent a lot adapting our marketing to the digital age,” Rochet said. “Investing new formats and platforms from YouTube to TikTok to Instagram to WeChat, and really completely changing our formats for faster and more interactive formats. That has been quite a journey.”

But it’s the way that people tend to buy their makeup that has seen the most significant transformation. “We have invested in technology such as AR or VR to give [customers] an extra experience when they shop our products,” said Rochet. “Those are things like virtual make-up or hair colour try-ons. It’s about teleconsultations that were big during covid. Those are service we propose to our consumers to enrich the experience.”

Like many things, the coronavirus pandemic simply accelerated existing trends that had been in train for years. Rochet points to the rise of livestreaming sales in China as an example of how the pandemic has amplified what was already there, making it more important and significant for consumers battling the challenges of coronavirus.

And as stores and businesses begin to reopen, Rochet feels L’Oreal is in a position of power. “We’re moving to an interesting moment where more people in a low-touch economy don’t want to touch products in the store,” she explained. “They don’t want physical testers. So we’re introducing services like virtual make-up try on, through a QR code people can experience the colours and the looks, but virtually.”

It’s something her CEO and chairman also agrees with. Setting out 2020’s financial results, Agon looked forward to 2021 with positivity. “Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger,” he said.

“At the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.”

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Ulta Beauty tumbles as profit outlook disappoints and CEO Dillon plans to step down

ulta
  • Ulta Beauty dropped nearly 9% on Friday following quarterly earnings the prior evening.
  • Ulta’s earnings-per-share view of $8.85 to $9.30 fell short of Wall Street’s target of $10.61.
  • CEO Mary Dillion will transition to the role of the board’s executive chair.
  • See more stories on Insider’s business page.

Ulta Beauty shares were knocked sharply lower on Friday after the cosmetics retailer’s yearly earnings guidance missed Wall Street’s target. The company also said CEO Mary Dillon will step down from the top role.

The company late Thursday forecast fiscal 2021 per-share earnings of $8.85 to $9.30, which includes the impact of about $850 million in share buybacks. Analysts were looking for earnings of $10.61 per share, according to data compiled by Refinitiv. Ulta’s revenue forecast was $7.2 billion to $7.3 billion, below the average analyst forecast of $7.32 billion.

The company in a separate announcement said Dillon will transition to the role of executive chair of its board of directors, with President Dave Kimbell to succeed her as CEO.

Shares dropped 8.5% to close at $318.15. They fell by as much as 12% to an intraday low of $306.06. The stock has gained about 11% this year and has climbed by 54% over the past 12 months.

“Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition,” said Dillon in the statement, noting that she had led the company for eight years. Kimbell joined Ulta Beauty as chief marketing officer in 2014.

For the fourth quarter ended January 30, Ulta posted adjusted earnings were $3.41 per share, down from $3.83 per share a year ago but higher than expectations of $2.35 per share. Revenue of $2.2 billion was ahead of Wall Street’s projection of $2.08 billion but down from $2.31 billion a year earlier.

Dillon will be nominated to stand for election to the company’s board of directors at its 2021 annual stockholders meeting to be held on June 2.

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Ulta Beauty tumbles 11% as profit outlook disappoints and CEO Dillon plans to step down

ulta
  • Ulta Beauty dropped 11% on Friday following quarterly earnings the prior evening.
  • Ulta’s earnings-per-share view of $8.85 to $9.30 fell short of Wall Street’s target of $10.61.
  • CEO Mary Dillion will transition to the role of the board’s executive chair.
  • See more stories on Insider’s business page.

Ulta Beauty shares were knocked sharply lower on Friday after the cosmetics retailer’s yearly earnings guidance missed Wall Street’s target. The company also said CEO Mary Dillon will step down from the top role.

The company late Thursday forecast fiscal 2021 per-share earnings of $8.85 to $9.30, which includes the impact of about $850 million in share buybacks. Analysts were looking for earnings of $10.61 per share, according to data compiled by Refinitiv. Ulta’s revenue forecast was $7.2 billion to $7.3 billion, below the average analyst forecast of $7.32 billion.

The company in a separate announcement said Dillon will transition to the role of executive chair of its board of directors, with President Dave Kimbell to succeed her as CEO.

Shares dropped 11% to a low of $308.32 as trading in the regular session got underway. The stock had gained 21% so far in 2021 and has climbed by nearly 68% over the past 12 months.

“Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition,” said Dillion in the statement, noting that she had led the company for eight years. Kimbell joined Ulta Beauty as chief marketing officer in 2014.

For the fourth quarter ended January 30, Ulta posted adjusted earnings were $3.41 per share, down from $3.83 per share a year ago but higher than expectations of $2.35 per share. Revenue of $2.2 billion was ahead of Wall Street’s projection of $2.08 billion but down from $2.31 billion a year earlier.

Dillon will be nominated to stand for election to the company’s board of directors at its 2021 annual stockholders meeting to be held on June 2.

Screen Shot 2021 03 12 at 8.24.40 AM
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Coty drops 19% as quarterly revenue misses Wall Street expectations

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  • Coty stock fell as much as 19% on Tuesday after reporting second-quarter earnings.
  • Second-quarter revenue of $1.42 billion missed Wall Street’s estimate of $1.43 billion.
  • Adjusted earnings of $0.17 per share were better than analysts had expected.
  • Visit the Business section of Insider for more stories.

Coty dropped by as much as 19% on Tuesday after quarterly revenue fell shy of Wall Street’s targets as the ongoing COVID-19 pandemic hurt sales of makeup.

The beauty products maker, whose portfolio includes brands such as Cover Girl, Rimmel and Kylie Skin, posted fiscal second-quarter net revenue of $1.42 billion, down 16% from $1.68 billion a year ago. Analysts had expected revenue of $1.43 billion.

Coty’s stock hit an intraday low of $6.47, marking an 19% decline from Monday’s closing price. So far in 2021, the stock has lost more than 7% and has slid by 45% over the past 12 months.

The company said its cosmetics and fragrance categories within its mass-beauty business “remained pressured” during the second quarter as the number of coronavirus cases ramped up in parts of the US, “impacting both store traffic and make-up usage occasions.”

But Coty noted that it saw further strength from its prestige fragrances in the US, with the Marc Jacobs, Gucci, and Burberry brands “delivering robust growth” in the quarter ended December 31.

Adjusted earnings were $0.17 per share, higher than Wall Street’s consensus estimate of $0.07 per share but lower than $0.27 per share in the same period in 2019.

Coty said it will begin raising its commercial investments to bolster improvements ahead of fiscal year 2022 despite “continued disruptions” to its sales channels and short-term orders related to the pandemic.

Read more: An ex-Merrill Lynch ETF maven shares how to construct a portfolio that’s perfect for today’s market landscape – including 4 must-have sectors for sustainable returns

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