L'Oreal CEO 'Optimistic' About Future Despite Slowdown In North American Market

L'Oreal Co LRLCY is seeing a slowdown in the U.S. market, but CEO Jean-Paul Agon told CNBC he remains positive about the future.

What Happened

France-based L'Oreal this week reported second-quarter and first-half 2019 results, which showed North America sales fell worse than expected at 1.1%. The beauty company was impacted by cyclical changes in the U.S. market, which is historically inconsistent and goes through periods of acceleration and slowdowns, Agon told CNBC. Nevertheless, 2019 is a "bit tough" for the brand with notable weakness in the makeup market which has "really slowed down."

Why It's Important

L'Oreal is "by far the number one player" in the market so naturally this presents a headwind for the company as a whole, the CEO said. The weak cycle is unlikely to last very long and the company continues to make pushes to offset the makeup category in categories like skin care, hair color and care.

Despite weakness in the American market, Agon remains encouraged against an environment characterized as "volatile, uncertain, complex, and ambiguous." However, the beauty market as a whole is "going ahead full steam" and L'Oreal will continue focusing on growth in new categories like e-commerce, travel and retail.

"Now we don't see any signs of change in this dynamic," he said. "So, pretty optimistic."

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