Shiseido, the leading cosmetics company in Japan, has announced that it will not be revising its annual forecast for 2022. The company had previously adjusted its forecast downwards due to the impact of the COVID-19 pandemic in its main markets of Japan and China. Despite a 38.2% decrease in net profit, earning 29 billion yen (around 200 million euros) in the first nine months of the year, Shiseido anticipates incurring a net loss in the fourth quarter, mainly due to exceptional costs associated with its structural reforms.

Shiseido’s operating profit for the first nine months of the year was 35.7 billion yen, representing a 62.7% decrease compared to the previous year. Despite this, the company has not changed its goal of achieving an operating profit of 40 billion yen, excluding exceptional items. Shiseido’s sales for the same period increased by 4.7% year-on-year, reaching 762.7 billion yen (approximately 5.2 billion euros). However, when excluding positive currency effects, sales decreased by 4.1%.

In the Japanese market, Shiseido has observed a gradual recovery since September. This progress can be attributed to the introduction of new products and increased consumer willingness to venture out as the pandemic situation improves. However, the company experienced a 10% decline in sales in both Japan and China during the first nine months of 2022. Conversely, sales increased in other regions such as Asia-Pacific, the Americas, EMEA (Europe, Middle East, and Africa), and the “travel retail” business (airport stores), which saw a substantial increase of 35.5%.

Shiseido maintains its expectation of achieving annual sales of 1,070 billion yen (approximately 7.3 billion euros), representing a 5.9% increase compared to 2021. Additionally, the company announced the appointment of Kentaro Fujiwara, the current head of its China operations, as chief operating officer starting January 1, 2023, to directly support CEO Masahiko Uotani.

Despite the challenges faced in its main markets, Shiseido remains optimistic about its future performance and is implementing measures to optimize its operations and drive growth. As the pandemic situation continues to improve and consumer demand recovers, the company foresees a stronger performance in the upcoming quarters.

Useful links:
Shiseido Press Release
Shiseido Annual Report