L’Oreal SA sales in the region that includes China unexpectedly fell in the third quarter as the cosmetics maker grappled with a challenging travel retail market.

Like-for-like sales in North Asia dropped 4.8%, the French company said Thursday, while analysts had projected a jump of more than 14% jump. Overall, the beauty company posted 11% sales growth, helped by a better-than-expected performance in North America and Europe.

The company’s American depositary receipts rose less than 1% at 1:09 p.m. in New York trading following the release. Its Paris-traded shares are up by around 16% so far this year.

L’Oreal follows disappointing results last week at luxury group LVMH Moet Hennessy Louis Vuitton SE, whose perfume and cosmetics unit also missed estimates.

“North Asia continued to be impacted by the reset in travel retail following the change in policy regarding daigous,” the company said in a statement, referring to the practice of Chinese tourists buying on behalf of others when traveling.

The difficult travel retail in the region had been previously highlighted by management after Chinese authorities started cracking down on the daigou trade earlier this year.

On a conference call, executives said the travel impact is limited and temporary, and predicted improvement in 2024.

L’Oreal’s consumer products division, with labels such as Maybelline New York and L’Oreal Paris, grew more than 13% in the period, far outpacing the 3.2% growth at its luxury unit. Customers have been trading down to lower-priced brands as inflation continues to squeeze household budgets.

Executives said consumers’ confidence in North America is high, while volume decreased in some European markets despite overall strength in the region.

(Updates shares in third paragraph and adds details from conference call in seventh and ninth paragraphs.)