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October 31, 2008
L'Oreal Plans to Increase Ad Spend
This excerpt from the Wall Street Journal is interesting as it pertains to CETV:
“But it's not just tough conditions that explain the slack sales of L'Oreal's cosmetics and its profit warning. That performance contrasts with robust sales and outlooks at Colgate-Palmolive and Unilever, more diverse rivals selling cheaper personal-care products.L'Oreal may have simply misread the market and let its advertising and promotion budgets slip, just when they needed a boost to win over pinched consumers. The company didn't give third-quarter figures, but A&P spending in the first half eased to 29.7% of revenue from 30.5% a year earlier.
L'Oreal has promised a burst of A&P spending to support what remain popular brands, but acknowledges that this will hurt margins.”
L'Oreal was one of the advertisers listed in CETV's analyst day presentation along with P&G, Unilever and other major consumer packaged goods companies.
I suspect investors won’t believe in local currency ad growth in 2009 in emerging markets until they actually see it but this a good reminder that big picture fundamentals support the possibility.
Posted by Steve Birenberg at October 31, 2008 09:58 AM in CETV
1 DO YOU THINK CETV AND MICC WILL RETEST THEIR LOWS?
2 WHY DO YOU THINK CETV IS BOUNCING LESS WITH THE STOCK REBOUND?
1 DO YOU THINK CETV AND MICC WILL RETEST THEIR LOWS?
2 WHY DO YOU THINK CETV IS BOUNCING LESS WITH THE STOCK REBOUND?
1 DO YOU THINK CETV AND MICC WILL RETEST THEIR LOWS?
2 WHY DO YOU THINK CETV IS BOUNCING LESS WITH THE STOCK REBOUND?
Got your voicemail. Sorry I could not get back to you.
1. I do not think the stocks will retest their lows unless the market does and right now I don't the market will. Measured form the low ($18), CETV is up about 50% so it hasn't completely lagged. It is just that the low is so much below where we ever thought.
2. There remain lots of negative headlines about Central and Eastern Europe and advertising so that is keeping the pressure on. Analysts are pretty cautious or negative and not providing support. The euro remains weak as do CEE currencies vs. the dollar. I think a weak dollar is a prerequisite for a big reobund inthe stock from here.
Posted by: Steve at November 3, 2008 02:59 PM