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By Sarah White and Pascale Denis
PARIS (Reuters) – L'Oreal shares fell on the face of the cosmetics firm Garnier shampoo and recipes in Europe faltered.
The French company posted higher operating income in the first half of the late on Thursday. Its luxury arm extended its strong run, with labels like Lancome doing well in China in an encouraging signal for US-based rivals Estee Lauder, which is more squarely focused on premium brands.
L'Oreal goal reported lower-than- expected comparable sales growth of 2.3 percent in the second quarter of its central mbad market division, and the United Kingdom, gearing up to leave the EU, emerged as a fresh weak spot in the group.
Its shares were down just over 4 percent at 1028 GMT.
"L'Oreal Chairman and Chief Executive Officer Jean-Paul Agon told badysts on a conference call on Friday.
"We think that we have everything to the market and clearly the ambition is to get back progressively, soon, to a rhythm, of 3 to 4 percent," he said but did not elaborate.
sluggish backdrop for mbad market products in L'Oreal's home market – echoing the cut-throat competition hampering
Other markets like Brazil and Italy were tough too but should improve, the company said. The outlook for Britain, as it gears up to leave the EU next March, was less encouraging.
Agon said L'Oreal had not lost market shares in the United Kingdom, where its consumer, luxury goods and professional products have traditionally done well. But he pointed to a "less buoyant" backdrop than a year ago, when a weaker pound had at least spurred on tourist purchases on premium cosmetics.
"Also there is a feeling in the United Kingdom, probably linked to this Brexit story, that is not what it used to be," Agon said. "The market is not in a great shape (…) and I'm not really confident that it will improve soon."
Overall, L'Oreal's operating income grew 1.8 percent from a year ago to 2.58 billion euros ( $ 3 billion) in the first half of the year, in line with forecasts.
The Asian market continued to outperform, and demanded from the United States, the United States, in the United States, mirroring encouraging signals from the broader luxury goods industry.
(Reporting by Sarah White and Pascale Denis; Editing by Sudip Kar-Gupta and Emelia Sithole-Matarise)
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