L'Oreal Reviewing Options for The Body Shop--Update

By Nick Kostov

PARIS -- French cosmetics giant L'Oréal SA on Thursday confirmed that it is considering selling The Body Shop, which has been its worst-performing business in recent years.

"We have decided with the board that it was time to explore all type of options regarding The Body Shop ownership," L'Oréal CEO Jean-Paul Agon said in an interview. "Despite all our efforts, we have been pretty disappointed by the results for the last two or three years, both in terms of sales and profitability."

Sales at The Body Shop, the global chain that pioneered the sale of natural beauty-care products, have slumped in recent years in comparison to L'Oreal's other businesses. A sale would come some 11 years after the French cosmetics giant bought the chain for GBP652 million as a way to tap into growing demand for natural cosmetics.

L'Oréal, home to brands including Lancôme, Garnier and Kiehl's, disclosed the strategic review as it reported fourth-quarter sales in line with the expectation of analysts.

The company reported that revenue at its mass consumer-goods business rose 4.2% on a like-for-like basis in the three months to Dec. 31, lifted by booming makeup sales. Sales growth at L'Oréal Luxe -- which includes brands such as Ralph Lauren and Giorgio Armani -- was 7.1% in the period as a result of the company's Yves Saint Laurent brand breaking the EUR1 billion mark.

Mr. Agon didn't give a precise forecast for the full year other than to express confidence in the company's ability to outperform the market again and achieve growth in sales and profit.

Net profit dropped to EUR3.11 billion in 2016 from EUR3.3 billion the previous year because of two impairment charges in the first half of the year. Sales for the full year rose 2.3% to EUR25.84 billion.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

February 09, 2017 13:33 ET (18:33 GMT)

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