Today Shiseido released its financial performance for the fiscal year ended December 31, 2024. For the fiscal year 2024, Shiseido reported a 1.8% increase in net sales to ¥990.6 billion ($6.5 billion).The core operating profit stood at ¥36.4 billion ($239.3 million), slightly higher than expected, but down ¥3.5 billion ($23 million) compared to the previous year, reflecting mixed regional performances.
Shiseido stated that The Travel Retail sector, especially in Hainan Island, faced a significant downturn due to declining Chinese tourist spending, while the U.S. and European markets saw modest growth, albeit with signs of a slowdown toward the year’s end. The Asia Pacific region experienced stable growth, particularly in Southeast Asia, although Taiwan’s market was impacted by a slowdown.
Regionally, in the Japan Business, the net sales recorded ¥283.8 billion ($1.87 billion), up 9.2% year-on-year on a reported basis, led by SHISEIDO, Clé de Peau Beauté and ELIXIR, on the back of a steady increase of loyal users. We also advanced our efforts to create a new market of foundation serum through strategic marketing, benefitting from the continued momentum of SHISEIDO REVITALESSENCE SKIN GLOW Foundation, while also driving growth buoyed by the success of new product launches in Clé de Peau Beauté and ELIXIR. While the number of foreign visitors to Japan continued to exceed its pre-pandemic levels to hit a new record high, inbound consumption grew at a more moderate pace than anticipated on the back of shifting trends in purchasing behavior of foreign visitors.
In the Americas Business, we delivered a year-on-year revenue growth in NARS and Tory Burch. Conversely, Drunk Elephant continued to suffer a slow recovery in sales subsequent to the temporary declines in production and shipments in the first half of the year, although stabilized in the third quarter. Its net sales were ¥118.5 billion ($778.9 million), up 7.5% year-on-year on a reported basis. Core operating profit decreased year-on-year by ¥11.0 billion ($72.3 million) to ¥0.2 billion ($1.3 million), owing primarily to a lower gross profit driven by sales decline.
In the EMEA Business, SHISEIDO and NARS enjoyed healthy growth. In Fragrances, narciso rodriguez fueled growth, as did ISSEY MIYAKE which benefited from the launch of a new product. The net sales were ¥132.7 billion ($872.2 million), up 13.4% year-on-year on a reported basis. Core operating profit increased by ¥0.3 billion (2 million) year-on-year to ¥3.7 billion ($24.3 million), due primarily to a higher gross profit driven by sales growth.
In the China Business, while it continued to be adversely impacted by the decline in consumer spending amid worsening economic sentiment in China over the course of the year, we still managed to deliver strong growth during “Double 11,” the largest e-commerce event in China, due largely to the low prior year comparison, reflecting the impact of consumer pull back on purchases of Japanese products after the release of treated water. During the year, Clé de Peau Beauté, ANESSA, and NARS delivered growth while SHISEIDO continued to face headwinds.
As a result, net sales in China Business were ¥250.0 billion ($1.64 billion), up 0.8% year-on-year on a reported basis. Core operating profit increased year-on-year by ¥5.3 billion ($34.8 million) to ¥12.3 billion ($80.8 million), with a decline in gross profit due to lower sales being more than offset by the positive impacts of structural reforms which included a reduction in cost of sales as well as fixed costs and expenses.
Shiseido stated that in 2025 while it expect revenue and profit to decline year-on-year in the China and Travel Retail Businesses, Shiseido are committed to achieving significant growth in our profitability by executing strategic product launches and price increases in the Japan Business, while driving strong sales recovery in the Americas Business. In the EMEA and Asia Pacific Businesses, we will focus our efforts on establishing a solid brand foundation to ensure stable and sustainable growth in our business.
As a result of such initiatives, Shiseido expect consolidated net sales of ¥995.0 billion ($6.54 billion) for the fiscal year 2025, reflecting a 4% increase year-on-year on a like for like basis, excluding the impact of foreign exchange translation and business transfers. We expect to achieve a core operating profit of ¥36.5 billion ($239.9 million) with a higher gross profit generated from revenue growth as well as positive results of our cost reduction initiatives, while the impacts of strategic marketing investments and higher personnel expenses due to inflation are also reflected in our forecast.
