Shiseido posts 14% sales jump, lowers FY forecast

By

Jennifer Braun

Published
Nov 11, 2021

Japanese cosmetics giant Shiseido announced on Wednesday a 14 percent jump in net sales, for the nine-month period ended September 30. 

Net sales totalled 745.37 billion yen (US$6.5 billion) driven by growth in Americas, EMEA, and travel retail, which offset the continuous weak momentum in Japan and slowdown in China, due to the spread of new Covid-19 variants and torrential rains. 

“In the first nine months of the fiscal year 2021, global economic conditions remained challenging, as economic activity was stagnant due to the Covid-19 pandemic, and consumer sentiment was low due to worsening corporate earnings and employment,” the company said in a statement.

“In the Japan cosmetics market, consumer traffic decreased as a result of consumers staying at home and shortened operating hours in the retail sector under the declared states of emergency. Other factors included a drop in visitors to Japan, which affected inbound demand. Globally, although the impact of the pandemic continued overall, progress in vaccination rollout drove recovery across all cosmetic categories, even makeup, which had struggled, particularly in Europe and the United States.”

The company recorded a net profit of 36.76 billion yen, while operating profit nearly tripled compared with the same period a year prior, coming in at 8.91 billion yen. 

The company’s sales fell 7.3 percent year on year to 210.3 billion yen in Japan. It strategically strengthened investment in the skin beauty category in line with new consumer needs and achieved market share gains in base makeup and sun care, but recovery from the effects of the Covid-19 pandemic has been slow.

Annual sales jumped 36.3 percent year on year to 89.8 billion yen in the Americas region, reflecting how vaccination rollouts drove the recovery of the cosmetics market, including makeup, which had struggled.

The China business was affected by partial retail closures and a drop in consumer traffic from July onward due to unprecedented torrential rains and new Covid-19 variant outbreaks, but e-commerce sales remained strong, resulting in net sales of 190.9 billion yen, up 23.1 percent. 

In Europe, the Middle East and Africa (EMEA), sales totaled 79.5 billion yen, up 31.9 percent year on year, while in Asia Pacific they also climbed 11 percent year-on-year to 48.1 billion.

Looking ahead, Shiseido revised its guidance for the fiscal year ending Dec. 31, lowering its forecasts for net profit and net sales. 

It now expects yearly net profit to come in at 30 billion yen, down from a previous forecast of 35.5 billion yen, as well as is forecasting yearly sales of 1,044 trillion yen, representing year-over-year growth of 13.4 percent.