Welcome to the conference call regarding L'Oréal sales at 31st of March 2025. The conference is about to begin. I now hand over to Eva Quiroga. Ms. Quiroga, please go ahead.
Thank you very much, Alexia, and good afternoon to all. Thank you for joining us for the presentation of our first quarter 2025 sales. I'm here with our CEO, Nicolas Hieronimus.
Good afternoon.
Our CFO, Christophe Babule.
Hello, good afternoon.
Our Global Head of Corporate Finance and Financial Communications, Laurent Schmitt.
Hello, good afternoon.
We know that for many, this call is the last thing that stands between you and the long weekend. Nicolas, we made just a few brief opening remarks before we go to Q&A. With that, over to you, Nicolas.
Yes, good afternoon, everyone. A few comments on this first quarter. As you know, globally, it's been a real roller coaster of economic and geopolitical challenges with daily announcements. In that context, I'm very pleased that we delivered organic top-line growth of +3.5% in line with our projections. Growth was boosted by EUR 100 million, which is the net impact of the IT-related inventory building between 2024 and 2025. As always, there were some good surprises and some not-so-good ones. The U.S. was more challenging than anticipated, and China was slightly less bad than expected. Europe was once again our single best growth contributor. Emerging markets remain dynamic.
Last year, we told you that we would step up our innovations in 2025, and I'm happy to say that our Beauty Stimulus Plan is off to a very promising start with strong contributions from our divisions and brands, including a few products like Gloss Absolue from Kérastase, PTOX from SkinCeuticals, Make Me Blush from Yves Saint Laurent, as well as the very aptly named Elvive Growth Booster by L'Oréal Paris. Its impact will only continue to increase as we extend our innovations into new markets and continue to launch more new products. Fragrances and hair care remained our two best-performing categories, and our Makeup Stimulus Plan is starting to bear fruit in a market that's unfortunately subdued.
Besides our obsession with growth, one of our key priorities in the current environment is to manage our P&L in order to mitigate the impact of tariff hikes. It goes without saying that our truly global manufacturing footprint and our very healthy gross margin positions us relatively well versus our peers. We will, of course, continue to put the right fuel behind our 37 global brands to further reinforce our global leadership. This makes me confident that we will continue to outperform the global beauty markets and achieve another year of growth in sales and profits. With that, let's go to the Q&A.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad. Please use your handset before asking your question and set your microphone on mute once you ask your questions. Next question is from Guillaume Delmas, UBS. Please go ahead.
Thank you very much, and good evening all.
Hello.
Hello. If I may, some housekeeping first. Christophe, can you maybe remind us what kind of tax rate you expect for this year? Also, if you could give us the Q1 like-for-like by product category. That would be the housekeeping. My two questions. First, on the outlook for the beauty industry in 2025. I mean, at the time of the full year result in early February, Nicolas, you were talking about 4%-4.5% market growth with some gradual acceleration through the course of the year. Is it still the case?
Given the increased geopolitical volatility, has it become much more difficult to forecast the development of the beauty industry this year? As a result, probably better to be cautious. My second question, it's on your restructuring effort this year. I mean, should we anticipate a more pronounced, a more significant focus on restructuring relative to the past few years? How should we view this? Is it defensive, so very much an attempt at protecting margins? Or is it more L'Oréal going on the offense as well and trying to free up resources to support this beauty stimulus? Thank you very much.
Guillaume, I'll go first maybe with the first question. I think it was related to the corporate income tax. What you can expect is, of course, it will depend on the mix of our sales by region, but basically, more or less the same corporate income tax percentage as last year, except that this year, as you know, we expect this exceptional corporate income tax to be of around EUR 250 million. That will be the exceptional burden for this year.
On the other questions, first on the categories. As you've heard, our quarter has benefited from this extra EUR 100 million from inventory building, which I have not calculated by category. I will give you the numbers by category, including this inventory building, which probably is a bit more skincare skewed because it was our China IT that was reset early April. By category, we're in high or mid to high single digit on hair. We are low single digit on makeup and skincare, and we are in mid teens on fragrance. It is clearly fragrance, as I said, fragrance and hair care, which are really driving the biggest part of our growth. It is, by the way, global. It is across all markets. As far as the market itself, the growth of the market itself, I said indeed the 4%-4.5%.
As I said in my opening statement, the market did not exactly start as we were hoping because the American market has been slower than expected. Even though China has been a bit better than expected, getting to flattish when it was mid single digit negative in Q4, the start of the year is not exactly what we hoped for. As I said in the annual results conference, most of our hope for this four to four and a half year lies on the second part of the year. Of course, it's very hard today to predict what will be the impact of this international turmoil and tariff wars on consumption itself.
I would say that today, I see no strong results or no hard facts to change my prediction. The only thing I would say is that, and by the way, I'd already said it from the get-go, that I see the market more on the lower end of that prediction than on the upper end. We'll see. We'll see. It's really too soon to tell. I mean, I guess that like me, you're seeing changes every day. Today, I see no real hard facts to change the prediction, rather just more on the low end. On restructuring, there's no real restructuring, as you may hear in some other companies.
At L'Oréal, we are constantly reorganizing. We have this big One L'Oréal Project that relies on this IT Transformation where we share a number of resources between our countries or between our divisions with one clear objective, which is to combine the scale and the power of the scale of L'Oréal and sharing resources, IT backbone, methods, markets analysis more than we ever did is a strong asset. At the same time, we want to keep our agility, particularly in markets, because in today's world, agility is of the essence. Yes, it does free resources to be more active in supporting our launches and to be more agile at market level, but there is no restructuring per se. We are just sharing more and more things at global level and leveraging more and more data to empower our businesses globally.
Thank you very much.
You're welcome.
Next question is from Charles Scotti, Kepler Cheuvreux . Please go ahead.
Good evening. Thank you very much for taking my questions. I have three. The first one on the U.S. market, we heard several retailers blaming Amazon Premium Beauty to extend their restocking and weak outlook for 2025. You mentioned China expansion in your press release. How are you positioned on this accelerated online shift in the U.S.? Do you think it can eventually disrupt your business with the brick-and-mortar partners? The second question, in the U.S., I think a bit less than 50% of your sales are made locally and over 30% from Europe. Is that correct? By how much do you need to raise prices in the U.S. to offset tariffs? Will you have eventually some room to grow your local productions if tariffs stay in place for longer? Finally, I'm just curious to hear the secret sauce behind your mid-teens growth for fragrances because we have seen some of your competitors releasing flattish, if not slightly negative, organic sales growth in Q1. I guess it's mostly market share gains, but I'm keen to hear more granularity on your performance on this category. Thank you.
Okay. Several questions. First of all, it's true that overall, I mean, it's more the US thing. Overall, in the world we live in today, online is growing faster than offline. It's true everywhere. It's true in Europe. It's true in India. It's true in China. It's true clearly in America and even Latin America. Our strength in digital is a clear asset for us. It's a way to penetrate markets where we were struggling to penetrate, like India before. In the U.S., which is a very big market, it's a way to reach our consumers and also sometimes to clean the market. Because if I take a great, I think a good example is because you're referring to the potential impact of being online on our brick-and-mortar partners.
I would take one very straightforward example, which is the professional division, hairdressers, where we are and still are selling our Kérastase shampoos, but we have opened Redken or Matrix to Amazon and Kérastase to Sephora and Sephora.com. In all instances, our partners, our salon partners, were grateful for us to do so because being on these channels officially allowed us to clean the gray market because you have to be totally clear that most of the brands are present online and on Amazon. The difference with being officially there and/or unofficially is that you have better control of the image, of the price, and our consumers expected us to be there. Today, if I take a brand like Kérastase, it is growing very strongly online in selective and offline in salons. It is, of course, something that has to be managed carefully.
It means that if I take the luxury brands that are on Amazon in the U.S., first, not all of our brands are there. We just opened Kiehl's last year. We had Lancôme, a few fragrances. It is also a model where it is, I do not want to be too technical, but it is a 3P model, which means that we are operating the sites. We are controlling the aesthetics and the price at which we sell. We are contributing to Amazon having the most complete selection, but without creating unwanted competition with our offline retailers. Overall, as always, it is a subtle balance between making our brands, putting our brands in the hands of consumers, but at the same time, protecting the image and the growth of our historical partners. We have no complaints of any of them.
I think it's a system that works as long as it's managed professionally and carefully. I'll stick to fragrance, and then I'll go to the tariff questions on production. On fragrances, you always have to be humble with fragrances because I think of all the categories, it's the one where it's as much art and intuition as it is science and consumer research. I must say that I'm blessed with the team that does phenomenal work at combining both. I think we have to be fair. We have great brands, brands that are hot: Prada, Yves Saint Laurent. Now we haven't started yet, but we are bound to launch our first Miu Miu fragrance. There are, I could quote several brands. Ralph Lauren has got exciting projects.
I think we have great brands and the capacity of both our fragrance creators and marketing teams doing a great job on this. I'm saying we have to be humble because it's never guaranteed. By the way, we still have areas of opportunities in the most premium part of the market, the collection and niche fragrances. Overall, I'm pretty pleased with what I see. I have an extra advantage over you is that I know what we're about to launch for fall, which is prior to the big holiday season on several of our brands. There are very exciting launches to come. I hope they'll have the same positive fate as the ones we have put on the market so far. Going back to the tariff thing, today, the numbers you mentioned are the assumption is right.
The numbers you mentioned are correct considering the US. Indeed, as a weight of turnover, it's a bit shy of 50% that is manufactured in the U.S., and 30% comes from Europe. The rest comes from Mexico, Canada, and a few other parts of the world. First of all, most of our CPD brands, CeraVe, are manufactured in North America. What is exported is mostly luxury. To answer your questions, indeed, there are several ways to mitigate these tariff impacts, which we hope not to be withheld. If they are, there are several ways for these to be mitigated. One is price increases because it's on categories that are in the luxury sector. You have a bit more pricing power.
Of course, we had built some inventory prior to the because we couldn't say that these tariffs were unannounced, even though the magnitude has been a bit higher than expected. We had built inventory on several of our brands. Whatever is confirmed will mainly impact our second half in terms of margin impact. We can take prices up. We have built inventory. Yes, we can relocate some of our productions. The good thing is that we have factories basically in every region of the world. We don't want to take any measures on something that might be temporary. We are watching carefully what's happening and trying to figure out what will be the end game. If, according to what's decided, we can take relocation measures.
Thank you very much, Verika.
Thank you.
Next question is from Celine Pannuti, JP Morgan. Please go ahead.
Hello, Celine. Hello. Hello, hello.
Celine Pannuti, your line is open.
Yes, bonsoir. Sorry. I hope you can hear me now. I have two questions. Maybe staying on the U.S., could you say, I think you grew 0.5%, whether there was any destock within that or, in fact, stock build as well benefits maybe some of your retailers loading some of the European luxury brands? If you could help us as well understand the trend within the quarter in the U.S. and what, I mean, from a category perspective, where you saw the most weakness versus your expectation, which, Nicolas, you mentioned at the beginning of the call. That's my first question. My second question is to try to understand as well the guidance. When you said that progressively improvement in growth rate, what is the best that you expect for your brand? Should we look at the 1.5% or the 3.5%? On the market growth, which I believe was probably around 1% at the start of the year, and I understand maybe difficult to predict yet what second half would be, could you help us understand maybe market growth in the U.S. and Europe where you say that both of them seems to have slowed? Thank you.
Okay. In the U.S., there's no particular inventory building. The only thing that we might have had a bit of, first of all, there was no inventory reduction aside from the comparative of last year's IT sales, of course. There was no inventory reduction and no inventory building either. Clearly, one of the divisions where we had the biggest new product intensity was luxury. That is probably the division where we invoiced a bit more than we sold through in the U.S. Overall, I think we are fine overall in terms of inventory. In terms of softness of the market, where the market was, in terms of compared to expectations, where the market was slower than expected, it is mostly in makeup.
Makeup, whether in mass or luxury, was really I don't know if it was affected by the lack of morale right now or also because right now, as always in makeup, the trend is more in what they call the me- but- better trend. There was a bit less makeup on and less colors. That is always a cyclical thing. Makeup was the category that was the most below our expectations. Haircare was pretty steady. Fragrance indeed slowed a bit, not us. That is the good news because we increased probably our market share gains in fragrance. In skincare, as we had seen in prior quarters, the derm market had slowed in the U.S., even though, depending on our brands, La Roche-Posay continued to do good. SkinCeuticals bounced back, and CeraVe remains right now a challenge.
Overall, as I said in my opening statement, we are more or less in line with our projections, slightly on the lower end of our prediction for the market. Nothing really changing in our projection for the future. Our estimation of the markets for Q1 is closer to +2% than +1%, which is why, again, depending on what is happening on the second part of the year, where the comparatives are significantly lower, I still believe we can be not too far from that +4% growth rate for the market. By regions, as I said, right now, Europe is still holding quite well overall. Maybe with France, with the exception of France, southern Europe continues to be pretty dynamic. Eastern Europe too. In the end, there is not a lot of new things since last time we spoke.
The only thing I can say is that I went both to China and to the U.S. over the last couple of weeks, and I felt indeed an American market that was less dynamic than expected. In some categories like makeup, in mass, even negative. On the other hand, I just come back from China, where the market was overall flattish on Q1, which is not great, but compared to the mid to high single-digit negative on the second half of the year, shows an improvement. By the way, we did beat that market overall. Yeah. We are, of course, there's no certainty looking ahead considering the context, but we are moving according to plan.
Can I just say on China, there was an article recently where your head of the country spoke about a 5% aim for China, L'Oréal Viseur. Can you concur?
Yeah. I don't confirm. I called him because as I just came, we had just had a meeting together. I challenged my team. I said, "Guys, the President of China gave an objective for his own growth at plus 5%. You have to give yourself ambitious objectives." He probably came out of the meeting with me with a little bit of boost, and he commented on that number. We never give such accurate numbers. What is for sure is that I expect my team to have a positive growth in China this year. That is what they are expected to do. We have new brands. We are opening in new cities. Some products and divisions are doing great. We are above market in luxe. We are very significantly growing in derma and professional. The one division that remains slightly below market in China is CPD, even though L'Oréal Paris is doing a good job. Overall, there is stronger competition in mass. That is where it is a bit harder. No, it was a bit my Chinese CEO was a bit euphoric. Overall, we have to be positive.
Merci. Thank you.
Next question is from Jeremy Fialko, HSBC. Please go ahead.
Okay. Hi, good evening. Thanks for taking the question. I've just got a couple more on the U.S. The first one is I know you've given us quite helpfully the detail on some of the kind of categories in the U.S. Could you talk more generally about the consumer in the U.S.? Were there any particular sort of income groups or demographics or just any things like that you could talk about as to where the slowing was most pronounced within the period? The second one is on this whole question of tariffs. Now, clearly, there are going to be competitors who might actually rely more on imports or more on imports from China than you do. Is there anything you've seen in terms of competitors having to raise their prices quite a lot in order to offset the tariffs or anything like that that you might be anticipating that could actually give you some degree of kind of competitive advantage in the market when other people are forced to price up and you're not?
In terms of demographics or in terms of consumer behavior in the U.S., the only thing I can say, which I've read like you probably, is that the latest numbers on consumer confidence in the U.S. have gone down, and they're lower than in Europe right now. We know that usually it affects spending on any category and in ours. Maybe the growth on makeup or the lack of growth on makeup has been impacted by this. There are things that I've heard other people say, but to be honest, I haven't seen any hard facts on that. I've heard some people saying that the Latino consumer, considering the anti-immigration situation, was a bit more shy in terms of its shopping habits and going to stores. Frankly, this is hearsay, so I can't really endorse this fact. It's just some things that people were saying.
It is clear that the climate right now in the U.S. is a bit less positive than it was, at least in people's mindset, than it was a couple of months ago. We will see how things evolve. I think if the morale of people follows the curves of the stock market in the U.S., you can clearly have a few highs and a few lows. Going back to the tariff thing, we have not seen anything short-term because, obviously, I guess we are not the only ones to have had some inventory. What is true is that in the world of indie brands, very clearly, many of them have been relying a lot on China.
If I take one of my favorite brands, which is NYX Professional Makeup, over the last couple of years, we have really worked at reducing the exposure of NYX to Chinese imported products. I think now it's around 20%, which is not nothing, but it's only 20%. We know that some of our very direct competitors are closer to 80%. At some point, if tariffs and particularly the tariffs against China are confirmed and stunned, it will indeed benefit some of our brands and in makeup in particular. It's too soon to say, too soon to see anything anyway.
Thanks very much.
Next question is from Olivier Nicolaï at Goldman Sachs. Please go ahead.
Hi. Good afternoon, Nicolas, Christophe, Laurent, Eva. I'll stick to two questions. Just following up on the U.S., I think you were losing market share in makeup last year, particularly in H2, mostly around the Maybelline brand. It doesn't seem to be the case from what we could read this afternoon. Could you give us perhaps a bit more color on what you've done to reverse share losses and if Maybelline is now back in line with the rest of the market? Secondly, on Brazil, that appears to be contributing very nicely to L'Oréal growth, mostly through haircare. How much upside do you see on Brazil, and where do you think you are in the journey there? Thank you.
On makeup in the U.S., we are indeed in CPD because that was really we had done a better job on luxe, but it was mostly through Yves Saint Laurent. I still think we still have to win share on luxury because some of our indie brands are not doing or ex-indie brands are not doing as good as I'd want. On mass, it was clearly a loss of market share last year. This year, we are winning share. It's a bit everybody. NYX continues to be very strong. L'Oréal Paris is doing great on makeup in the wake of the Panorama Mascara launch, which is already a year old but continues to thrive, plus a few new products. We have a new mascara launch that's called the Big Deal, Lash Paradise Big Deal.
I guess between Elseve Growth Booster and Big Deal, maybe we are creating positive omens for our brands. Maybelline is in a recovery mode. We have some of the new products we've launched, Teddy Tints, etc., are doing good. I would say Maybelline is more on par with market and not really gaining share at this point. Of all the makeup brands, it's the one that still has some, it's also the biggest one. It's probably the one that's most affected by the market difficulty right now. It's improving. Great on NYX, great on L'Oréal Paris, and getting better on Maybelline. On Brazil? On Brazil, haircare is a fantastic success story. I must say we have, and it continues, by the way.
The interesting thing on Brazil right now is that we have, I would say finally, because it's been a long and winding road, we have a break in Garnier Skincare. We've launched a new product from Garnier, which has our moisturizers with a very impressive breakthrough formula from our lab, which is a formula that's both very moisturizing and super dry on the skin. It's called Garnier, it's a Tokeseko Dry Touch Moisturizer. The thing seems to be really flying off the shelves and really loved by the young generations of Brazilians because precisely it's the ideal cream for all those who hate moisturizers because it makes your skin greasy in the sun.
That's as they come out of summer. That's a good start. I think we have good, the only part of our catalog which is not doing phenomenal today in Brazil is, well, which was already very big, is Dermatological Beauty. We have strong plans coming back in the second half. Overall, I think CPD, to take your expression, CPD has a lot of headroom still to grow because we've only really made it in hair right now. I think we can do great in skin.
Thank you very much.
Next question is from Sara Simon, Morgan Stanley. Please go ahead.
Yes. Thanks for taking my questions. The first one was just around phasing. In terms of the benefit in North Asia, should we expect all of that to be reversed in the second quarter, or will it spread across the year? Just back on what Celine had asked about, in terms of the progressive improvement, I'm assuming it's fair to think that given you'll have this headwind from the unwind of North Asia, that it's versus the underlying growth that we should expect improvement through the year. The second question was just on Walmart pushing more aggressively into beauty. Is that significant for you? I mean, did you benefit from that in Q1, or would you regard that as just part of the usual kind of retailer movement? Thanks.
First of all, on the growth over the year, I think we see the acceleration really more a second-half story than necessarily a quarter-by-quarter acceleration. Indeed, it has something to do with the North Asia comparatives. Also, it is the beginning of the slowdown of the value effect in our own numbers and in the market's numbers. We always phase by year with a slower, at least in our planning, a slower first half and a stronger, better second half. We will see how things unfold. Of course, you have new products. Some will be great hits, and that will allow us to go faster. I hope they all are, but I do not know yet. It is more a second-half story.
We will be entering in the second half, of course, the comparative is North Asia, but it is really within North Asia, it is travel retail because the story of travel retail is that travel retail Asia remains very negative and fell out today. Both Hainan and Korea, which were what we call the downtown stores in travel retail, have really lost traction with the reduction, the healthy reduction of Daigou, and it is more airports over the world that are driving the growth of travel retail. The second half of last year, we were already in sellout in negative territories, in strong negative territories for travel retail. That will be part also of the easier comps. That is what I can tell you on the progressive acceleration. Sorry, what was your second question? Because, oh, yeah, Walmart. Yeah.
On Walmart, I would not say that we benefited from their acceleration into beauty. We are actually encouraging them a lot to focus more on beauty. If I look at the situation today, there are some positives and negatives. The positive is indeed they are wanting to accelerate in beauty, and they are one of our strongest partners in North America. Of course, we are absolutely determined to support them in their own desire to accelerate in beauty, particularly for our mass products, but also for our mass medical brands such as CeraVe and even La Roche-Posay. On the other hand, if I am sincere, I visited a very beautiful Walmart a month ago. Right now, they have taken these anti-theft measures where they have locked under windows makeup and skincare in their stores.
Of course, that has a very negative impact on the sell-through of beauty. If I look at year-to-date, the sellout in Walmart is not positive. The good thing is that there were some Canadian retailers that gone that same direction a couple of last year, two years ago, and we've proven to them that it was in the end, it was more detrimental than beneficial. Right now, yes, Walmart is more into beauty, but if they want to sell beauty, which is partly an impulse purchase, having to call a sales assistant that comes from the other side of the store to sell you or to give you a lipstick is not necessarily the best way to accelerate beauty. That is part of the discussions we have with the Walmart team. I must say they are very positive about working on these issues and developing the category because it's a big potential for us and for them.
Great thanks.
Next question is from Thomas Sykes, Deutsche Bank. Please go ahead.
Yeah. Good evening. Thank you. Just firstly on the IT transformation, could you say whether for the full year you expect IT switchover to be positive, negative, or neutral? How much of your global revenues are currently on the new system? How much have we got further to go? Sorry, I guess in addition to that, you did not quite answer the phasing of when this quarter's benefit would reverse. Any view on that, please? Just on FX, you have given the FX at the end of March, but obviously, things have moved quite a bit then. I do not know whether you could give a view on the spot impact of FX and perhaps importantly, the net financials number. I do not think you have given a guide on that yet. Presumably, that is impacted by derivatives in there. Yeah. Please.
Okay. I'll take both questions. The first one is on IT. I can tell you that the implementation of our new IT system is going quite well. We just launched China. That was early April, and it was a very successful one. We have a couple of big countries yet to come by end of this year, U.K. and Australia. Difficult to assess exactly what will be the net impact, but I guess it will be minimal. For the full year, we should not see any big discrepancy between this year versus last year. Usually, it reverses the following quarter. We never put six months inventory, so it's always a small two- to three-week inventory. It disappears after one or two months.
Regarding FX, of course, very difficult today to predict because the US dollar was at 1.03 just a couple of weeks ago. Today, it is close to 1.15. I have done some simulations, basically. When you look at the sales, if, for example, we keep the current exchange rate at 1.15 versus the U.S. dollar for the full year, then probably the impact will be at around 250-290 basis points on the net sales, negative impact. We will see. It is very volatile, so I will not reach any conclusion as of today. Of course, we have hedged our internal. As you know, our internal transactions are fully hedged. We are pretty well protected on the P&L. No impact if the rate keeps the current situation.
The net financials, sorry, impact of FX? I guess there's derivatives in there. Sorry.
Oh, what I can tell you is for the time being, when I look at the FX impact, I compare the current hedge rates of this year versus last year, we have a negative impact. This has been factored already when we build the budget. We have a negative impact, actually, which is in the range of EUR 50 million and mainly impacting first semester.
Okay. Thank you very much.
Final question is from Ashley Wallace, Bank of America. Please go ahead.
Good evening. Thank you for taking my questions. I actually have three from my side. The first one is on mainland China. You mentioned that the beauty market growth in mainland China was close to flat in Q1. I was wondering if you can share how L'Oréal performed in that context, both from a sell-in and a sellout perspective. As I think last year in Q1, you still had a pretty tough comp from sell-in. Maybe any color you can give on value versus volume trends in your China business in the quarter. The second question is just on U.S. distribution. That market has seen pretty dramatic change over the last couple of years, especially if you think about, I guess, Amazon taking share versus drug stores losing a lot of share.
Can you maybe help us contextualize what percentage of your business comes from, say, Amazon, drug stores, and the specialty beauty retailers at the moment and how that compares to a few years ago, even if there's gold comments? The third question is more of a math question on the IT phasing. I think last year, you had EUR 130 million benefit from IT phasing. It was a headwind this year. You are saying that the net benefit in total this year is EUR 100 million so far in the first quarter.
The gross benefit to the first quarter 2025 being around EUR 230 million. I think when I read the statement from a regional perspective, that ties into 850 basis points benefit to Asia. However, when I look at it from the perspective of the divisions, you say 300 basis points benefits L'Oréal Luxe, which seems to only account for half of the benefit of the IT phasing. I was wondering if you can help us understand where the other half of the phasing benefit is accounted for from a divisional perspective, or if my math is wrong. Thank you.
All right. On mainland China, indeed, the market was flattish and slightly, I do not know if it is minus 0.2% or minus 0.3% or something like that. We are roughly one percentage point above that growth in sellout. As I said, we are above the market in Pro Hair with the strength of Kérastase, significantly above the market in Derma with double-digit growth on our Derma brands. We are above market by one percentage point on luxury, where we are very strong leaders. I have to say, I was very pleased to see that we increased our share. Our share on the global, on the mainland market, is now significantly superior to our share in the travel retail world, which is something that is very important for the health of our business. We are gaining share.
I think we are also benefiting from the serious work we've done to protect our luxury business in mainland China. As I said, we are below market in CPD, where the market is slightly positive and we're slightly negative. Overall, we win share. We win share both online and offline, knowing that the online market is positive, whereas the offline market is negative. I think that's the important information. Talking about sell-in is a bit complicated because, as you mentioned it yourself, there is a significant chunk of the sell-in, which is the inventory building of our neo transformation project. It will not be, I would have to recalculate by division, brands, etc., which we haven't done. What is clear is that we've put a little bit of inventory that will phase out on Q2.
We continue, the important thing for us is to win share in sellout. The most important news for me is clearly the fact that the market seems to be more stabilized. The phasing of some of the holidays, Valentine's Day, was a bit beneficial this year. We will see whether it is confirmed in the second quarter, the big 618, 18th of June promotion. We will see on China. I would say the teams were positive. When I went to China, I met several officials of the Chinese government, the secretary of the Guangzhou Province, and then the secretary of the Shanghai Province. What was interesting is that they were both talking a lot about boosting consumption, about the fact that the real estate crisis was, according to them, again, a bit more behind.
I felt, if not confidence, at least real determination to boost local consumption. Of course, that was before the tariff hike. I do not know what all this will generate. There was at least a focus on boosting consumption from the Chinese authorities. On U.S. distribution, I am not going to give you all the details, but clearly, the weight of e-commerce has increased for us. The U.S., as I have said several times, was one of the rare countries where our share of online was below our share of offline, and it still is. We are progressively catching up with, of course, the development of Amazon, but also working with Walmart.com or Sephora.com. The online is accelerating in the U.S., and it is very positive for us. Clearly, drug stores, as you mentioned, are lowering in the weight of our business because they are struggling themselves to be successful in the U.S. market. I do not know if you want to add anything, Christophe, on that topic.
No, maybe I can answer on the third question because you wanted to know a bit what is the split by division. Of course, big impact on luxury. The second division that is most impacted when you compare the IT implementation in 2024 and 2025 is, of course, our professional product division, where here the growth is impacted, and it is nearly 800 basis points. On the remaining two divisions, it is marginal.
Okay. Thank you.
Okay. Ashley, I think you were the last one. We are wishing everyone who's still on the call a Happy Easter. Hopefully, well, not hopefully, we will be speaking to you in a couple of months. Thank you very much, and Happy Easter.
Ladies and gentlemen, this concludes the conference call. Thank you for your participation. You may now disconnect.