L'Oreal Paris chair

L'Oréal’s not so beautiful year

This week, L'Oréal’s earnings disappoint, Spotify hits 600 million monthly active users, and Uber records its first-ever yearly profit. 

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💡 But first, the macro wrap-up:

The S&P 500 hit a new record of 5,000 points on Thursday, after better-than-expected earnings from some of its major stocks.

L'Oréal slips 7% as earnings disappoint 💄

Up $6 bill: Last night, L'Oréal reported its Q4 earnings for 2023, closing the year with $44bn in revenue, $6bn more than 2022. But, sales in Asia lagged, leading to a drop in share price. 

  • Trouble in China: A year marked by geopolitical tensions, inflation and a slowing beauty market in China led to profits coming in below analysts’ forecasts for 2023.

  • Bonjour beauty: But, there is some good news. Its dermatological beauty and consumer product divisions led the surge, did leave investors impressed thanks to growth of 29% and 15% respectively.

Uber up 6% after announcing first-ever annual profit 🚕

A monumental moment: After 15 years, Uber has finally recorded an annual net profit. It comes as demand for taxis and deliveries have soared to new heights, as well as growing its ad business inside the app.

Spotify climbs 7% as active listeners grow 🔊

Moving towards profitability: On Tuesday, Spotify reported a narrower loss than analysts expected. The loss came in at $74m for the quarter, down from $290m this time last year. 

  • Monthly active listeners: Spotify crossed the 600 million mark for monthly active listeners, helping revenue reach almost $4 billion for the year. It means it has 200 million more listeners than Apple Music and Amazon Music combined. 

  • Sights set on profit: Now, Spotify wants to turn up the volume with profit. Expect new price subscription tiers, more layoffs and revised deals with top podcasters.

What have we learned this week? 🤓

  • The beauty market is set for growth: The largest segment in the market is personal care, which as savvy investors will know, is also L'Oréal’s largest division. 

  • Growth stocks are exploring dividends: First Meta, now talks of Uber - growth stocks are trying to attract a new type of investor by paying dividends. 

  • Spotify is edging closer towards profitability: In the 16 years Spotify has operated, it’s never reported an annual profit. The key this year will be cost-cutting.

Stock announcements 👀

Here are the key earnings dates to look out for next week:

  • Tuesday: Coca-Cola, Airbnb, Shopify

  • Wednesday: Kraft Heinz, Cisco

  • Thursday: Coinbase

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*Figures and ratings correct as of February 9th 2024.

Past performance does not guarantee future results. Capital at risk when investing. This content is for educational purposes only. Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor.

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James Ashoo

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