Shiseido, the renowned Japanese beauty powerhouse, experienced a dramatic decline in its stock price, reaching a 16-year low in Tokyo on Monday. This downward spiral was precipitated by the company’s downward revision of its profit guidance for 2023, primarily driven by weak performance in China and travel retail during the third quarter.
The stock closed at a staggering negative 14.3 percent, plummeting to 4,185 yen ($27.57). This sharp decrease reflects the market’s reaction to the company’s release of its third-quarter results on Friday, which revealed disappointing growth figures for the three months ending on September 30. Notably, the negative impact was primarily attributed to a decline in consumer demand for Japanese products in China and travel retail, triggered by Japan’s controversial release of treated water into the Pacific Ocean. This summer, Japan initiated the discharge of treated wastewater from the disabled Fukushima Daiichi Nuclear Power Station, a decision that sparked controversy. Despite Japan’s assurance regarding the safety of the treated water and confirmation from the International Atomic Energy Agency, consumer confidence waned, impacting Shiseido’s performance significantly.
Shiseido’s net profit for the third quarter experienced a substantial decline of 29.4%, amounting to 20.5 billion yen ($135.1 million). Furthermore, the company’s sales dropped by 5.3%, reaching 722.4 billion yen ($4.76 billion).
During the period, Shiseido faced a significant setback in China, with sales retracting by 9 percent on a like-for-like basis compared to the third quarter of 2022. The weakening consumer sentiment towards Japanese products in the region contributed to this decline.
During the period, Shiseido faced a significant setback in China, with sales retracting by 9 percent on a like-for-like basis compared to the third quarter of 2022. The weakening consumer sentiment towards Japanese products in the region contributed to this decline.
