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L'Oreal third-quarter like-for-like sales growth misses estimates

PARIS (Reuters) - L'Oreal's sales growth in the third quarter slumped to its lowest level since 2009, a drop the world's biggest cosmetics group attributed to weak trading at its mass-market products division, particularly in western Europe.

The group saw third-quarter like-for-like sales growth slow to 2.3 percent, compared with growth of 4.1 percent in the previous three months and an average estimate cited by analysts of 3.6 percent.

"There was a very strong deceleration in the market in a very short period of time," L'Oreal Chief Executive Jean-Paul Agon said about the group's sales in western Europe in a conference call, citing factors such as lower consumer spending.

However, he said trading in western Europe had improved since the end of September and growth in the United States also picked up since the summer.

As a result, he forecast a rebound in sales growth in the fourth quarter which would be the year's strongest.

Overall, the maker of Lancome perfume and Garnier shampoo said it expected to "slightly outperform" the global cosmetics market in 2014, a more modest forecast than its traditional target of outperforming the worldwide market.

Agon said he expected growth in the global cosmetics market to be closer to 3 percent than 3.5 percent in 2014 and reach 3 percent to 3.5 percent next year.

In September Agon had already cut his 2014 market growth forecast to between 3 percent and 3.5 percent from between 3.5 percent and 4 percent previously.

"L'Oreal joined the (long) list of consumer staples companies who have missed consensus expectations in Q3," broker Bernstein said in a note, mentioning rivals with disappointing results such as Unilever .

In the United States, rival Elizabeth Arden posted its third straight quarterly loss, largely due to its large exposure to perfumes, a category that has seen weak demand in North America.

Last week, Revlon also published a drop in underlying earnings while the Estee Lauder Companies publishes its quarterly results on Tuesday.

L'Oreal said it was actively pursuing potential acquisitions "whose development will fuel the group's like-for-like growth" but declined to give details about targets.

Sales at L'Oreal's mass-market division that makes Essie nail polish and Maybelline mascara fell 0.4 percent on a comparable basis, against 2.8 percent growth in the previous three months.

The group's luxury unit behind Yves Saint Laurent and Armani perfume saw sales growth slow to 4.9 percent from 7.5 percent in the second quarter.

Agon said luxury sales in China had been slowing but the group was still "largely overperforming" the market's estimated annual growth of 8 percent.

"Clearly, the market is not as buoyant as it was three, or four years ago," Agon said about China.

(Reporting by Astrid Wendlandt; Editing by James Regan and David Evans)