European companies’ results show they’re navigating US tariffs a lot better than anticipated — a good omen for next year when they’re expected to deliver double-digit profit growth.
A Goldman Sachs Group Inc. basket of European stocks most exposed to tariffs outperformed the broader market in October after trailing for most of the year. The basket, including companies like Legrand SA, BMW AG and Adidas AG, rallied about 6% as the earnings season unfolds, twice the gains of the Stoxx Europe 600 and three times those of domestically tilted equities.
“In truth, the impact of tariffs has so far been somewhat negligible for European companies except some rare exceptions,” said Nicolas Domont, a fund manager at Optigestion in Paris.
Tariffs or not, the US has driven sales growth at a slew of the region’s companies, from Hermes International SCA and Unilever Plc to Galderma Group AG, ABB Ltd. and Haleon Plc. That’s setting the stage for next year when consensus expectations are for Stoxx 600 companies’ earnings per share to grow 12%, according to data compiled by Bloomberg Intelligence.
In the latest quarter — the first period when Trump’s tariffs were in place — several companies credited growth in the Americas for their ability to beat analysts’ estimates and raise their outlook.
Birkin bag maker Hermes racked up a whopping 14.1% jump in sales in the region that includes the US. Unilever credited strong North American demand for its better-than-expected sales. Swiss skincare giant Galderma raised its outlook for the year citing strong US sales.
“Tariffs are testing profit resilience worldwide — and so far, companies are managing to adapt,” wrote Bloomberg Intelligence equity strategist Gillian Wolff. “Europe’s exporters have trimmed expenses to offset higher energy prices and the bite of tariffs.”
Unilever is a case in point. Growth in North America for the maker of Hellmann’s mayonnaise was led by demand for personal care items such as Dove soap and premium products like K18 hair care and Nutrafol supplements. Unilever said it’s cutting costs to avoid pushing up prices and forcing consumers toward cheaper brands.
“We continue delivering significant volume growth in the US,” said Chief Executive Officer Fernando Fernandez.
President Donald Trump’s administration has slapped a 15% tariff on goods imported from the European Union, 10% from the UK and 39% from Switzerland, in addition to sectoral levies on industries like steel.
European pharmaceutical companies like Novartis AG, GSK Plc and Roche Holding AG have been in talks with the US government on cutting drug prices and have pledged billions in investments for a reprieve on looming sectoral tariffs. UK peer AstraZeneca Plc struck a deal in October.
Companies’ efforts to mitigate the impact of tariffs has forced investors to cover their shorts or jump back into exporters. The tariff issue has dropped off the radar and comes up less and less on earnings calls, Bloomberg analysis shows. Transcripts show EU companies are optimistic on the outlook, less worried about tariffs and positive on AI efficiency gains, a Barclays report on Friday said.
“We passed peak uncertainty in April when Trump announced tariffs which were well above expectations,” said Ariane Hayate, a fund manager at Edmond de Rothschild Asset Management. “What’s really reassuring is the speed at which companies have adapted to tariffs and have been able to announce shift of production to other countries or the US, like for the pharmaceutical companies, but also smaller consumer goods maker.”
Cetaphil maker Galderma raised its full-year growth target on optimism about the US market, where it has committed to spend more than $650 million on manufacturing through 2030. Carmaker Stellantis reported a 13% jump in net revenue in the third-quarter aided by a recovery in North America, where the Jeep and Ram owner updated its offering and worked down inventory. It has pledged to invest $13 billion in the US over the next four years.
Purveyors of luxury, including LVMH Moët Hennessy Louis Vuitton SE and Gucci owner Kering SA reported growth in North America, suggesting a possible end in the downward spiral in the demand for high-end goods. Elsewhere, sales unexpectedly grew in North America for the UK’s Haleon, fueled by products like Sensodyne toothpaste and Tums antacid. Swiss automation technologies provider ABB saw orders soar on AI demand, and said it hasn’t seen any material impact on demand or profitability from US tariff-related uncertainties.
Granted, not all companies have been spared. Spirits makers like Remy Cointreau SA and Pernod Ricard SA, forced to make their Cognac in the region that gives the beverage its name, have signaled a weaker-than-expected US recovery. Tiremaker Michelin has warned that it sees its North American struggles lasting into next year, while French cosmetics maker L’Oreal reported weakness in the US.
“There’s a narrative growing along the lines that the tariffs are manageable, that they won’t hurt that much but I think it’s too soon to tell,” said Gilles Guibout, head of European equities at AXA IM. “There was a very positive surprise on pharmaceuticals, for instance, but the dust hasn’t settled yet. These things take time to implement and to kick in. My take? To be continued! Let’s not forget that there’s also the FX impact on earnings that will gradually percolate through.”
Estee Lauder was sued by a self-described “disruptive” startup that accused the cosmetics giant of effectively putting it out of business by stealing technology to boost sales from jet-setting travellers in hotels.
Nomi has accused Estee Lauder of stealing its technology – Bloomberg
In a complaint filed on Friday night in Manhattan federal court, Nomi Beauty said Estee Lauder has been “driving literally billions in new revenue” to itself after abandoning contracts in 2018 and 2020, including means to determine consumers’ actual preferences for cosmetics instead of their stated preferences.
Nomi- the name is a homophone for “know me,” as in the customer- said its “secret sauce” was intended to help the parent of Clinique and MAC lipstick generate more revenue from luxury hotel duty-free shops and in-room purchases, and become less dependent on traditional retail stores. Rather than honour its contracts or follow through on discussions to purchase Nomi outright, Estee Lauder allegedly starved Nomi’s hotel partners of products, while rolling out competing programs in China, Costa Rica, Malaysia, the UK and the US.
These programs “rely on the very same trade secrets Nomi had been educating Lauder about for years,” the complaint said. Nomi is seeking unspecified compensatory, punitive, and triple damages. Estee Lauder did not immediately respond to requests for comment.
“Nomi’s stolen innovations brought Estee Lauder into the information age, and Estee Lauder continues to profit from them wildly,” Nomi’s lawyer Matthew Schwartz said in an email. Both companies are based in New York.
Since last February, Estee Lauder has pursued a “Beauty Reimagined” strategy, including prestige launches and a streamlining of its supply chain, to revive sliding sales. The strategy also called for up to 7,000 job cuts.
Long reserved for women or military dress, brooches adorned men’s chests during Milan Fashion Week, a throwback to a bygone era but with jewellery now signalling individuality, not just status.
A brooch by Dolce & Gabbana – Aleksej Shelikhov- Facebook
From huge flowers or watch brooches at Dolce & Gabbana to pins at Armani, the bling passed from hands to jackets during the fall/winter 2026/2027 shows in the Italian city.
“I like these small details, people have to pay attention to them,” said reggaeton star Rauw Alejandro, in the front row at Prada.
Chinese buyer John Chen, 45, sported a gold brooch in the shape of a triangle, the Milanese brand’s logo, on a green sweater just below his neck. “I started wearing brooches about five years ago. I like to play with them” to personalise outfits, he told AFP.
In Armani’s refined yet relaxed collection, some men sported a tie pin on their jacket lapel, while male and female models wore matching sparkling brooches. At designer Rowen Rose, a large orange stone was used to fasten a green or yellow scarf to a matching sweater.
“It gives an extra touch. It’s a good accessory- it’s become very masculine,” said Fabio Annese, a 26-year-old Milanese interior designer sporting a heart-shaped brooch at Dolce & Gabbana.
Known for its extravagant style, D&G has been selling brooches for men since entering the jewellery world in 2015, and they are “still important in more formal collections,” a spokesperson said. Among their offerings are crosses, crowns, scarabs, and flowers in gold and embellished with diamonds, the last costing a cool 7,500 euros (around $8,800).
The trend is in many ways a return to the past. In Europe, until the 18th century, the “most important” jewellery was worn by men, explained Emanuela Scarpellini, professor of contemporary history at the University of Milan.
Wealthy and powerful men used it as a sign of their status, the glittering accessories often signalling membership of a noble family or a religious order, or military rank. It was only with the rise of the middle-classes and businessmen in the 19th century that came “the idea that men should dedicate themselves to work, with a more sober attitude,” Scarpellini said at the launch of a new Milan exhibition.
“The Gentlemen,” on show at the Palazzo Morando until September, reveals how men’s jewellery since then usually served a purpose, such as watches, cufflinks and tie pins. Nowadays “there’s a new freedom,” as with clothing, said exhibition curator Mara Cappelletti, a professor of jewellery history.
“There are fewer jewellery pieces with a function, and more with a freer choice,” she told AFP. “Many of the objects men wear today were not designed for a male audience,” she said, adding that many were vintage. “The brooch has never been so popular.”
Cappelletti noted that the trend was boosted by singers and actors wearing a lot of jewellery, noting a photograph of Italian singer Achille Lauro sporting a huge white gold and diamond sculpted piece on his chest, with matching earrings. All provided by the jeweller Damiani, which sponsors the pop star.
Global beauty business Sephora has announced a strategic, omni-channel partnership with Korean beauty and health retailer CJ Olive Young to bring a wide range of K Beauty products to its global customers.
CJ Olive Young aims to bring K Beauty to global shoppers – Olive Young
The partnership will debut this autumn with omni-channel partnerships set for the US, Canada, Hong Kong SAR, and Southeast Asia (Singapore, Malaysia, Thailand), Sephora announced in a press release on Tuesday. In 2027, the business will bring the tie-up to the Middle East, the UK, and Australia.
“Korean beauty is one of the most innovative, fastest growing, and desirable categories in beauty right now,” said Sephora’s global chief merchandising officer Priya Venkatesh in a press release. “Sephora was the first major retailer to debut K Beauty brands to North American consumers in 2010, and our portfolio has grown into a global business. We are thrilled to partner with leading Korean beauty retailer Olive Young, bringing their expertly curated assortment of Korean beauty brands to our beauty fans globally. Their differentiated assortment, coupled with Sephora’s unique point of view on the beauty shopping experience, will bring an unrivalled and inspiring offer for all beauty lovers who are keen to explore the most sought-after Korean beauty products.”
Sephora shoppers will be able to browse a dedicated zone curated by CJ Olive Young comprising popular Korean health and beauty brands. The business’ beauty advisor will also offer guidance and assistance to customers to help them find their desired products.
“We are pleased to enter this partnership with Sephora as we continue to advance our global expansion strategy,” said CJ Olive Young’s chief strategy officer Youngah Lee. “As global interest in K-beauty continues to accelerate, we see this collaboration as a meaningful opportunity to work together in expanding the reach of Korean brands in key international markets.”
Politics8 years ago