Today, Shiseido released its financial report for the first half of 2024, revealing mixed results across different business segments and regions. The report shows that Shiseido Group’s net sales for the first half of the fiscal year 2024 decreased by 0.5% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers, reaching ¥508.5 billion ($3.47 billion).
However, when excluding the impacts of foreign exchange translation, business transfers, and the acquisition of Dr. Dennis Gross Skincare, this figure represents a 4.1% year-on-year decline on a like-for-like basis excluding the impacts of foreign exchange and business transfers on a foreign exchange-neutral basis.
Core operating profit for the period was ¥19.3 billion ($131.5 million), a decrease of ¥8.8 billion ($60 million) year-on-year on a like-for-like basis excluding the impacts of foreign exchange and
business transfers. The main reasons for the decline were reduced sales in the Travel Retail, Americas, and China Businesses. However, revenue growth in the Japan, EMEA, and Asia Pacific Businesses, along with the positive impacts of structural reforms, partially offset this decline. Profit in other segments also decreased year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers due to reduced intersegment sales to the Travel Retail and China Businesses, as well as increased elimination of unrealized gains.
Profit attributable to owners of the parent decreased by ¥11.7 billion ($79.7 million) year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers, resulting in zero profit. This decline reflects the impact of lower core operating profit and the recognition of structural reform expenses, primarily associated with the Early Retirement Incentive Plan in the Japan Business.
Net sales in the Travel Retail Business decreased year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers due to changes in purchasing behavior of Chinese tourists, leading to lower shipping volumes. Similarly, the China Business was adversely affected by a slowdown in consumer spending due to weak economic sentiment.
The Americas Business also saw a year-on-year decline on a like-for-like basis excluding the impacts of foreign exchange and business transfers in net sales, primarily due to temporary production declines affecting shipping volumes.
Conversely, the Japan Business showed strong growth, driven by a focus on high-growth, high-profit brands and strategic marketing initiatives aimed at creating new markets. The EMEA Business maintained strong momentum, and the Asia Pacific Business achieved solid growth.
Specifically, the Japan Business recorded net sales of ¥141.5 billion ($964.3 million), up 13.3% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers. Core operating profit increased by ¥11.6 billion ($79.1 million) to ¥7.9 billion ($53.8 million), driven by higher sales and improved cost efficiencies.
Net sales in the China Business were ¥131.7 billion ($897.5 million), down 6.6% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers on a like-for-like basis. Core operating profit decreased by ¥600 million ($4 million) to ¥4.9 billion ($33.4 million) due to lower sales.
Shiseido specifically noted that reduced consumer spending in China contributed to the decline in performance. Additionally, while the 618 e-commerce promotion driven by Douyin saw strong growth, price competition continued to intensify. In mainland China, the Shiseido brand declined by more than 20% in the first half of the year, while the CPB and NARS brands saw high single-digit growth.
Net sales in the Asia Pacific Business were ¥34.4 billion ($234.4 million), up 5.9% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers on a like-for-like basis. Core operating profit increased by ¥2.0 billion ($13.6 million) to ¥2.2 billion ($15 million), driven by sales growth.
The Americas Business saw net sales of ¥57.3 billion ($390.5 million), down 5.4% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers on a like-for-like basis. Core operating profit decreased by ¥1.5 billion ($10.2 million) to ¥2.6 billion ($17.7 million), mainly due to lower sales reducing gross profit.
Net sales in the EMEA Business were ¥62.8 billion ($428 million), up 11.8% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers on a like-for-like basis. Core operating profit increased by ¥2.5 billion ($17 million) to ¥3.7 billion ($25.2 million), driven by higher sales.
Net sales in the Travel Retail Business were ¥66.9 billion ($455.9 million), down 22.7% year-on-year on a like-for-like basis excluding the impacts of foreign exchange and business transfers. Core operating profit decreased by ¥7.7 billion ($52.5 million) to ¥7.7 billion ($52.5 million) due to lower sales. In the Travel Retail Business, which primarily sells cosmetics and fragrances through airport and downtown duty-free stores, strong recovery in Japan was driven by the rising number of foreign visitors, surpassing pre-pandemic levels. Conversely, sales in Hainan Island and South Korea were affected by lower shipping volumes due to changes in purchasing behavior of Chinese tourists, impacting overall sales.
