By Mimosa Spencer

PARIS (Reuters). -Cosmetic group L’Oreal beat expectations for first quarter sales growth Tuesday. This was despite concerns over inflation and lockdowns in China. Consumers snapped up top-quality beauty products in key markets, putting aside any worries about China’s slowdown.

“We are not even close to experiencing a luxury down-turn, we see many people that are affluent and even the middle classes want to indulge,” L’Oreal chief executive officer Nicolas Hieronimus told analysts in a call.

“The overall demand for luxury products and premiumized products is very high – the market is premiumizing overall,” he added.

With 18% growth in sales, the Active Cosmetics division (which includes CeraVe and Vichy labels) grew at an accelerated pace. L’Oreal Luxe which is the largest, and sells Lancome and Giorgio Armani products, saw 17.5% growth. These two divisions make up the most lucrative divisions of beauty giant L’Oreal Luxe.

The overall group’s sales increased 13.5% to 9.06 billion euro ($9.8billion) on a comparable basis in the first three months 2022. This was aided by double-digit growth from North America, Europe and China.

According to consensus estimates cited by, analysts had predicted 10.6% growth in sales. Credit Suisse (SIX:).

Analysts at RBC said that this was a positive statement with solid momentum supporting L’Oreal’s key drivers of growth. They cited North Asia, North America, and the Active Cosmetics Division.

China is a country where store traffic has been affected by lockdowns to stop the spread of COVID-19. However, executives expressed optimism, noting that the market remains vibrant in Hainan, which could be a strong opportunity for the company. Although online traffic has been increasing, Alibaba Hieronimus reports that Tmall (NYSE:) is growing rapidly, as are other retailers such JD (NASDAQ.:).Com, and TikTok’s Douyin platform.

Hieronimus was asked how Russia’s company was assessing the risks. The Russian group has temporarily shut down stores, and now counts 2200 workers and a manufacturing plant. Hieronimus stated that he is keeping an eye on the reactions of employees and customers, even though the group’s position “very well understood” and was widely accepted.

He stated that he was monitoring the situation closely in both terms of sentiment from consumers and the sentiment of his teams, and that he is taking every precaution to mitigate any potential reputational risks.

($1 = 0.9270 euros)