Today, Shiseido released its financial report of the first nine months of fiscal year 2024. It reveals flat net sales at ¥722.8 billion on a reported basis, reflecting a 5.2% year-on-year decline on an FX-neutral basis and a 3.1% decline on a like-for-like basis, adjusting for foreign exchange and business transactions, including the acquisition of Dr. Dennis Gross Skincare.
The Travel Retail and China businesses faced headwinds; the former saw reduced shipping volumes, particularly from a slowdown in consumer spending by Chinese tourists, while the latter grappled with reduced consumer spending amid economic uncertainty. The Americas Business also reported a year-on-year sales decrease due to production delays, though stabilization occurred by Q3.
Specifically to regions, Japan continued to outperform, with net sales of ¥211.2 billion, a 10.2% increase year-on-year, thanks to a focus on high-growth brands like SHISEIDO, Clé de Peau Beauté, and ELIXIR, alongside successful product launches and inbound tourism, albeit with moderated consumption growth from foreign visitors. Core operating profit in Japan rose significantly, reflecting a ¥19.1 billion improvement year-on-year.
In China, the net sales were ¥173.9 billion, down 2.4% year-on-year. Shiseido stated that the Group are making a shift from a growth model driven by large-scale promotions to a more sustainable growth model which focuses on value-based brand and product communication tailored to consumer needs in China. While economic sentiment continued to challenge spending, select brands like Clé de Peau Beauté and ANESSA achieved growth. This led to a slight increase in core operating profit despite an overall net sales declined.
The Asia Pacific region, led by Thailand, reported steady growth with key brands driving an overall increase of 9.1% in reported sales, while core operating profit rose by ¥3.0 billion due to higher gross profit from sales growth. The Americas Business showed resilience, with net sales rising by 6.8% year-on-year, although a delayed recovery affected brands like NARS and Drunk Elephant.
The EMEA region enjoyed positive growth driven by proactive marketing and a strong performance from fragrance brands, though the growth rate slowed due to shipping delays.
Shiseido’s Travel Retail Business showed a marked decline, with ¥85.8 billion and a 21% drop in net sales largely influenced by a decrease in purchases by Chinese tourists, notably impacting sales in Hainan Island and South Korea.
