L'Oreal Q4 sales miss forecasts; aims for 2010 growth

PARIS (Reuters) - French company L'Oreal pledged to improve turnover and earnings in 2010 when posting fourth-quarter sales below forecasts, particularly luxury products such as Yves Saint Laurent make-up and Lancome creams.

The Paris-based group, which also sells Garnier shampoo and Vichy face creams, said on Monday it had come out of 2009 stronger and had "prepared itself well for a return to sales and results growth in 2010."

L'Oreal's October-December like-for-like sales rose 1.5 percent, missing market expectations of 2.4 to 4 percent growth.

"L'Oreal spent a lot of money in advertising (last year) but clearly that did not help its sales enough," one Paris-based analyst said, declining to be named.

Revenues from luxury products, which also include Shu Uemura lipstick and Kiel's herbal remedies, fell 4.7 percent on a comparative basis during the fourth quarter, while many analysts had expected a rise, some by as much as 4 percent.

Sales from professional brands used in hair salons fell 1.5 percent during the period.

"The fourth quarter sales are disappointing particularly in luxury and somewhat in professional products but consumer goods sales were a little bit better than expected," one London-based analyst said.

Meanwhile, revenue generated by L'Oreal's consumer products division, traditionally more resilient than other units, rose 5.2 percent on a like-for-like basis.

L'Oreal posted a 5.4 percent fall in full-year 2009 earnings before interest and tax (EBIT) to 2.578 billion euros ($3.5 billion) for 2009, in line with expectations for 2.594 billion based on Thomson Reuters I/B/E/S estimates.

The group proposed raising the dividend 4.2 percent to 1.5 euros.

Its shares closed barely changed on Monday at 76.75 euros, valuing the company at 45.8 billion euros, before its results.

(Editing by Dan Lalor)