L’Oréal‘s shares on Wednesday extended a deep sell-off after the cosmetics giant reported quarterly sales below expectations, citing reduced beauty products demand in China and slower growth for its dermatological division.

Shares were down 3.7% at 0844 GMT. They have plunged 20% since June, and are at their lowest levels since January 2023.

Shares in competitor Beiersdorf also fell 1.5% at market open, before recovering.

Across a broad range of companies, China’s economic weakness has curbed customer buying and the luxury sector, reliant on discretionary spending, has been hard-hit.

After the market close on Tuesday, L’Oréal, which sells luxury labels including Lancôme and Kiehls and mass market products such as Maybelline mascara, posted a 3.4% rise in sales for the three months to the end of September to €10.28 billion ($11.10 billion). That was below a Visible Alpha consensus of 6% cited by Jefferies.

Investors were nervous ahead of the results, but the numbers were worse than expected, said Barclays analysts.

“L’Oréal has missed three out of the last four quarters, with China consistently worse than we feared,” they said in a note.

The China market deteriorated, with luxury beauty products in the “negative mid-teens”, and as an expected improvement in travel retail did not materialise, CEO Nicolas Hieronimus told analysts late on Tuesday.

“We expect a tough Q4 2024 and Q1 2025 ahead,” wrote JP Morgan in a note on L’Oréal, while Deutsche Bank analysts reiterated their ‘sell’ rating on L’Oréal.