L’Oréal, the world’s largest beauty company, is refining its strategy as it navigates challenges in the U.S. and Chinese markets. In a recent call with analysts, CEO Nicolas Hieronimus and CFO Christophe Babule discussed a shift in focus needed to address a slowdown in beauty spending, particularly in North Asia, where sales dipped by 2.5%. This downturn contrasts with a modest growth of 5.3% in global sales, reaching $11.75 billion.

Despite its diverse portfolio, which includes strong brands like Skinceuticals and Cerave, L’Oréal’s performance reflects broader industry trends impacting even competitors like LVMH and Unilever. As consumer spending on prestige beauty softens, L’Oréal opts for a quality-over-discount approach, emphasizing brand reputation and product innovation. Babule noted the company’s commitment to maintaining market share without resorting to aggressive discounting.

Bright spots remain, particularly in Europe, where sales increased by 9.7%. L’Oréal plans to enhance its product lineup, with specific attention on affordable skincare lines such as Cerave, which is expected to expand in the Indian market. Additionally, the introduction of smaller premium product ranges and refill options aims to cater to price-sensitive consumers, particularly in China, where skincare refills have gained popularity.

Amid inflationary pressures, L’Oréal continues to invest in marketing and innovation, focusing on key product lines like Lancôme’s Genifique. The company’s approach reflects a commitment to adapt and respond swiftly to market dynamics, ensuring it remains a leader in the evolving beauty landscape.