Shiseido’s Reports Lower Fiscal Year Profits Despite New Growth Strategy

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The cosmetics company announced on Friday that full-year sales for the fiscal year ending December 31 increased by 5.7 percent to almost 1.07 trillion yen, equivalent to $8.1 billion.

“Our yearly e-commerce sales achieved increase, thanks to the expansion into major platforms and improved communication concentrating on effect and efficacy”, Shiseido observed in its announcement. “While the market saw a considerable year-over-year loss during ‘Double 11,’ the largest e-commerce event in China. Meanwhile, on the offline front, sales declined year over year due to the lockdown.

Shiseido has been operating under a medium-term plan known as “Win 2023 and Beyond” since 2021, which saw it implement structural reforms like the sale of several of its makeup brands and its personal care division while increasing profitability in crucial markets like the Americas and EMEA (Europe, the Middle East and Africa). It has boosted the sales ratio of these brands and items in an effort to refocus its business on what it refers to as “skin beauty,” a sector of the market where it thinks it has a competitive edge.

Shiseido’s flagship in Ginza, Tokyo. COURTESY: SHISEIDO

Shiseido also unveiled its “Shift 2025 and Beyond” growth plan for the years 2023 to 2025. Shiseido wants to restore the growth of its Japanese business, which was not attained during the previous business plan, through its updated strategy. Shiseido claims that in order to reach a core operating margin of 12% by 2025 and 15% in 2027, it will prioritize brand, innovation, and customer relation. Fragrances and the company’s flagship lines; Shiseido and Cle de Eau Beauté will serve as growth catalysts.

Shiseido projects a net profit decline of 18.1% to 28 billion yen for its current fiscal year and a net sales decline of 6.3% trillion.

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