Core Insights - Shiseido is currently undergoing a painful reform period, with a decline in net sales and operating profit reported for the third quarter [1][7] - The company has lowered its sales forecast for the entire year of 2025, indicating ongoing challenges in its transformation efforts [1][7] Performance Decline - For the first three quarters of 2025, Shiseido's net sales amounted to 693.817 billion yen, a year-on-year decrease of 4%, with an operating loss of 33.35 billion yen [2] - In 2023, net sales were 973 billion yen, down 8.8%, and operating profit was 28.1 billion yen, a decline of 39.6% [2] - The decline is attributed mainly to the impact of the Chinese and travel retail markets, with sales in these regions dropping by 6% and 9% respectively [2] - The high-end makeup brand, Drunk Elephant, saw a significant revenue drop of 49% in the first three quarters, marking it as a key factor in the overall performance decline [2][3] Transformation Strategy - Shiseido has been implementing a transformation strategy called "SHIFT 2025 and Beyond," focusing on revitalizing its domestic business in Japan [4] - The company introduced a more actionable "Action Plan 2025-2026" to achieve three main goals: consolidating brand foundations, rebuilding profit bases, and enhancing operational management [4] - Shiseido has identified eight priority brands, including "Core 3" and "Next 5," and plans to invest an additional 30 billion yen (approximately 1.45 billion RMB) in marketing for these brands [4] Management Restructuring - In 2025, Shiseido initiated a global management restructuring plan to optimize organizational structure and improve operational efficiency [5] - The company has made 12 key executive changes across various strategic regions, impacting brand management, marketing, and travel retail [6] - The appointment of new leadership, including a new CEO, aims to strengthen the company's strategic direction and operational capabilities [6] Future Outlook - Shiseido has revised its sales forecast for 2025 from an initial 995 billion yen to 965 billion yen, with expected losses increasing to 42 billion yen [7] - Industry experts suggest that the current performance decline may be temporary, and with ongoing reforms, Shiseido could return to growth in the near future [6][7]

Core Insights - Shiseido is currently undergoing a painful reform period, as indicated by its recent third-quarter performance report, which shows a decline in net sales and operating profit losses [1][3] - The company has been experiencing a consistent decline in net sales over multiple quarters, prompting the implementation of a transformation strategy and the establishment of growth targets [1][5] - Shiseido has lowered its sales forecast for the entire year of 2025, reflecting ongoing challenges in its business operations [1][9] Financial Performance - For the first three quarters of 2025, Shiseido's net sales amounted to 693.817 billion yen, a year-on-year decrease of 4%, with an operating loss of 33.35 billion yen [3] - In 2023, Shiseido's net sales were 973 billion yen, down 8.8% year-on-year, and operating profit was 28.1 billion yen, a decline of 39.6% [3] - The decline in performance is primarily attributed to the impact of the Chinese and travel retail markets, with sales in these regions dropping by 6% and 9% respectively [3][4] Brand Performance - The significant decline in revenue from the high-end makeup brand "Drunk Elephant" has adversely affected Shiseido's overall performance, with a 49% year-on-year drop in revenue for the first three quarters [4] - In the third quarter alone, Drunk Elephant's revenue fell by 19%, following a 57% decline in the first half of the year [4] - The brand's management has acknowledged issues with its market positioning and is focusing on inventory management [4] Strategic Initiatives - Shiseido has been actively pursuing transformation strategies over the past two years, including the "SHIFT 2025 and Beyond" mid-term strategy aimed at revitalizing its domestic business [5] - The company has outlined an "Action Plan 2025-2026" to achieve three main goals: consolidating brand foundations, rebuilding profitability, and enhancing operational management [5] - Shiseido has identified eight priority brands for development, including "Core 3" and "Next 5," with an additional marketing investment of 30 billion yen (approximately 1.45 billion RMB) planned for these brands [5] Management Changes - In 2025, Shiseido initiated a global management restructuring plan to enhance human resource efficiency and streamline operations [6] - Key leadership changes include the appointment of Kenji Fujihara as the new CEO and the introduction of new executives to strengthen the company's travel retail business in the Asia-Pacific region [6] Future Outlook - Shiseido has set ambitious targets in its 2030 mid-term strategy, aiming for a core operating profit margin of over 10% by 2030 and a compound annual growth rate in sales exceeding market growth by 2%-5% from 2025 to 2030 [7] - Despite current challenges, there are indications that Shiseido's performance may improve in the future as it adapts to market demands and consumer preferences [8] - The company reported an 8% growth in its China travel retail segment in the third quarter, driven by the performance of its core brands [8] Sales Forecast Adjustment - Shiseido has revised its sales forecast for the entire year of 2025 from an initial 995 billion yen to 965 billion yen, with expected losses widening to 42 billion yen [9] - The ongoing adjustments in business operations and management are seen as efforts to mitigate the impact of the current reform period [9]

Core Insights - Shiseido Group is undergoing significant turmoil with management changes, business restructuring, and a challenging market environment, as reflected in its Q3 2025 financial results [1][19] - The overall performance remains under severe pressure, with net sales declining and operating profit showing a drastic loss [1][19] Financial Performance - For the first three quarters of 2025, Shiseido Group reported net sales of 693.817 billion yen (approximately 32.061 billion RMB), a year-on-year decrease of 4.0% [1][2] - Core operating profit was 30.08 billion yen (approximately 1.39 billion RMB), reflecting a year-on-year increase of 9.7% [1][2] - Operating profit showed a significant loss of 33.35 billion yen (approximately 1.541 billion RMB), a staggering year-on-year decline of 1627.71% [1][2] Market and Brand Performance - The decline in sales is primarily attributed to the impact of the Chinese and travel retail markets, where consumer confidence has worsened, leading to continued sluggish consumption [3][11] - The Americas market continues to struggle, with Shiseido's brands, particularly Drunk Elephant, facing negative growth [7][9] - Despite challenges, the Japanese market showed moderate growth, and there are signs of recovery in the overseas cosmetics market [3][11] Brand-Specific Insights - The Drunk Elephant brand has been a significant contributor to the overall decline, with a reported drop of 19% in Q3 2025, following a 57% decline in the first half of the year [4][6] - In contrast, the Next 5 brands, including ELIXIR and Anessa, reported sales growth, with ELIXIR showing a notable increase of 17% in Q3 [6][7] - Core brands such as Shiseido, Clé de Peau Beauté, and NARS experienced sales growth of 6%, 12%, and 2% respectively in Q3, although Shiseido's overall sales were slightly down by 1% for the first three quarters [7][13] Strategic Initiatives - Shiseido Group announced its 2030 mid-term strategy, aiming for a 7% core operating profit margin by 2026 and a compound annual growth rate in sales exceeding the market by 2-5% from 2025 to 2030 [14][19] - The company is implementing a new executive and board structure to enhance global operations and governance, with new appointments aimed at strengthening leadership [16][17][18] - The strategic focus includes high-growth categories, digitalization, and sustainability, indicating a comprehensive transformation effort [18][19]

Group 1 - Major Japanese cosmetics companies are facing significant challenges, with varying performance across different brands and markets [2][7][30] - Kao Corporation reported a remarkable increase in operating profit by nearly 108%, while other companies like Kose and I-ne experienced declines of 17.7% and 17.0% respectively [2][7] - Several brands under major Japanese cosmetics companies are struggling, with notable declines such as a 57% drop for the brand "Zui Xiang" and decreases for brands like Anessa, Shiseido, Decorte, and POLA [2][10] Group 2 - The Japanese cosmetics market is facing challenges, with a 3.4% decline in the overall market and specific brands like Kose's Sekkisei down by 0.5% [2][30] - The performance in the Chinese market is dragging down overall sales, with many companies planning to withdraw, liquidate, or close stores by 2025 [2][28] - Kao is the only company among the five major Japanese cosmetics groups to show growth across all markets, with increases of 2.4% in the Americas, 3.0% in Europe, and 2.3% overseas [2][30] Group 3 - Shiseido's operating profit turned positive, but net sales showed only a slight increase of 0.82%, indicating ongoing challenges [9][30] - Kose's net sales increased by 0.9%, but its operating profit fell by 17.7%, highlighting the difficulties faced by the company [9][30] - POLA ORBIS reported a decline in net sales by 1.4%, primarily due to reduced sales from its core POLA brand [21][23] Group 4 - I-ne's skincare segment saw a significant increase of 432%, while its hair care segment declined by 10.8% [27][28] - Kao's beauty-related sales for the first half of 2025 reached 211.5 billion yen (approximately 10.32 billion RMB) and 118.5 billion yen (approximately 5.78 billion RMB) for cosmetics, with both segments showing profit growth [13][15] - Kose's high-end brand sales showed mixed results, with Sekkisei growing by 11.4% while other core brands like Decorte faced declines [16][18] Group 5 - The overall performance of Japanese cosmetics companies indicates a need for strategic adjustments, especially in light of economic downturns and increased competition in the Chinese market [37][40] - Companies are exploring growth opportunities in Southeast Asia, but face challenges from numerous competitors in these emerging markets [47][28] - The Japanese domestic market also presents challenges, with brands like Zui Xiang ceasing operations and Kose's Sekkisei facing a slight decline [42][45]

Core Insights - Shiseido Group is still in a "low period" with a sales decline of 7.6% year-on-year, reporting sales of 469.83 billion yen for the first half of the fiscal year ending June 30, 2025 [1] - The core operating profit increased by 21.3% to approximately 23.37 billion yen, indicating some operational efficiency despite the sales drop [1] Brand Performance - Among the eight brands, only three achieved sales growth, with the "Zui Xiang" brand experiencing a significant sales decline of 57% [2] - The three core brands (Shiseido, Clé de Peau Beauté, and NARS) saw Shiseido's sales drop by 4%, while Clé de Peau Beauté and NARS grew by 3% and 2% respectively [2] - The future brands saw mixed results, with only the anti-aging brand "Irisir" achieving a 12% increase, while others like "Anessa," "Narciso Rodriguez," and "Issey Miyake" faced declines of 15%, 1%, and 9% respectively [2] Zui Xiang Brand Challenges - The Zui Xiang brand, acquired for $845 million in 2019, has faced a continuous decline, with a 25% drop in sales in 2024 and a staggering 65% decrease in the first quarter of 2025 [3] - The brand's sales fell by 57% in the first half of the year, leading to a 5.3% decrease in Shiseido's sales in the European market [3] - Zui Xiang has exited the Japanese market entirely, including online channels and six physical stores [3] Market Performance - Sales in all regional markets declined, with the smallest drop in Japan at 0.6%, totaling approximately 145.9 billion yen [4] - The Americas market saw a 10.1% decline to 51.5 billion yen, heavily impacted by Zui Xiang's poor performance [4] China and Travel Retail Business - The China and travel retail segment accounted for 37% of Shiseido's total sales, despite a 12.4% year-on-year decline to 173.9 billion yen [5] - Core operating profit in this segment fell by 15.65% to approximately 38.8 billion yen [5] - The company is restructuring its operations in China to enhance brand consistency and improve cost efficiency, with a focus on online sales where the main brand Shiseido is performing well [5] Future Outlook - Shiseido aims to minimize risks from sales declines through structural reforms and cost management, maintaining a target of 36.5 billion yen in core operating profit by 2025 [5] - The company plans to revitalize Zui Xiang through new product launches and expects to return to stable growth by 2026 [5] - Cost reductions of 13.5 billion yen have already been achieved in the first half of the year, with a target of 25 billion yen for the entire year [5]

Core Insights - Shiseido reported a sales revenue of 229.96 billion yuan for the first half of 2025, a decrease of 7.6% year-on-year, marking the largest decline in the past five years [1][4][5] - The core operating profit for the same period was 11.38 billion yuan, reflecting a year-on-year increase of 21.3% [1][2][5] - The decline in sales was observed across all five major business regions globally, with the largest drop in the China travel retail segment, which saw a 12.4% decrease [1][10][16] Financial Performance - The sales revenue for the first half of 2025 was 229.96 billion yuan, down 7.6% year-on-year, and down 6.1% when adjusted for local currency [2][5] - Core operating profit increased to 11.38 billion yuan, up approximately 2 billion yuan from the previous year, representing a 21.3% growth [2][5] - Operating profit turned from a loss of 1.33 billion yuan in the previous year to a profit of 8.81 billion yuan [2][5] Historical Performance - The first half of 2025 marked the largest sales decline for Shiseido in the past five years, with previous years showing either growth or minimal decline [4][5] - In 2021, Shiseido recorded the highest sales growth of 21.5% in the first half, while other years had growth rates below 3% [4][5] Regional Performance - The China travel retail segment's sales were 84.76 billion yuan, down 12.4%, making it the most significant decline among all regions [10][16] - The Americas region saw a 10.1% decrease in sales, while the Asia-Pacific and European regions experienced declines of 2.3% and 5.3%, respectively [10][16] - Japan's sales decreased by 0.6%, indicating a broad downturn across all major markets [10][16] Brand Performance - Among Shiseido's brands, CPB, NARS, and ELISE showed positive growth, with ELISE achieving a 12% increase in sales [6][9] - The overall brand sales declined by 4%, but excluding the China travel retail area, the brand's sales increased by 4% [9][16] - The brand "Zui Xiang" experienced a significant drop in sales by 57% [9][16] Strategic Initiatives - Shiseido aims to achieve a core operating profit of 36.5 billion yen (approximately 17.77 billion yuan) for the year, despite the sales decline [17][18] - The company plans to cut costs globally, having already reduced 13.5 billion yen (approximately 6.57 billion yuan) in the first half of the year, with a target of 50 billion yen (approximately 24.34 billion yuan) in total cost reductions over the next two years [18] - Shiseido is focusing on brand optimization, management efficiency, and cost control to navigate the challenging market environment [17][18]

Core Insights - Shiseido Group faces significant challenges, with a notable decline in performance across all regions, particularly in China and travel retail markets, which experienced double-digit drops compared to the previous year [1][2][5] Financial Performance - For the first half of 2025, Shiseido Group reported net sales of 469.83 billion yen (approximately 22.846 billion RMB), a year-on-year decrease of 7.6% [1][2] - Core operating profit increased by 21.3% to 23.372 billion yen (approximately 1.137 billion RMB), while operating profit recovered from a loss of 2.728 billion yen (approximately 133 million RMB) to 18.084 billion yen (approximately 880 million RMB) [1][2] - The decline in net sales is attributed mainly to weak performance in the Chinese and travel retail markets, as well as the impact of the Drunk Elephant brand [2][5] Market Performance - The overall net sales decline of 8% in the first half of 2025 marks the first drop for Shiseido in three years [2][5] - The Japanese market saw the smallest decline at -0.6%, while the Chinese and travel retail markets experienced the largest drop at -12.4% [2][5] - In the second quarter, all markets except for the Americas and travel retail showed low single-digit growth, with travel retail down approximately 20% [2][5] Brand Performance - The Drunk Elephant brand significantly impacted overall performance, with a 43% year-on-year decline in Q2 and a 57% drop in the first half of 2025 [10][12] - Despite challenges, the Shiseido and NARS brands showed growth when excluding the impact of the Chinese and travel retail markets, with Shiseido brand sales increasing by 4% [12][19] - The Next 5 brands, particularly ELIXIR, demonstrated double-digit growth in the second quarter and the first half of 2025 [10][12] Regional Insights - Shiseido's performance in the Chinese market is affected by economic downturns leading to low consumer spending, with offline channels continuing to decline [16][19] - The Americas market is facing challenges, particularly for the Drunk Elephant brand, while other brands like Shiseido and NARS have seen some growth [23][31] - The company has announced significant layoffs in the Americas region as part of restructuring efforts [26][31]

Core Insights - Shiseido Group's Q1 2025 financial results indicate a significant decline in net sales and core operating profit, reflecting ongoing challenges across all regional markets [1][3][7] Financial Performance - The net sales for Q1 2025 were 228.24 billion yen (approximately 11.10 billion RMB), a decrease of 8.5% year-on-year, marking the lowest in four years [3][7] - Core operating profit fell to 8.25 billion yen (approximately 0.40 billion RMB), down 27.2% compared to the previous year [3][7] - The company reported a turnaround in operating profit, achieving 7.20 billion yen (approximately 0.35 billion RMB) compared to a loss of 8.75 billion yen (approximately -0.43 billion RMB) in the same quarter last year [2][3] Regional Market Performance - All regional markets experienced declines, with the Chinese and travel retail sectors down by 12.1% year-on-year [5][21] - The Americas market saw a significant drop of 14.5%, primarily due to the poor performance of the brand Drunk Elephant, which plummeted by 65% [10][13] - In Europe, the decline was less severe at 9.2%, aided by growth in the brands SK-II and NARS [13][21] Brand Performance - Among the Core 3 brands, Shiseido and NARS saw net sales decrease by 7% and 2% respectively, while SK-II was the only brand to show growth at 2% [10][19] - The Next 5 brands had mixed results, with only Elixir showing an increase of 11%, while others experienced declines [10][19] Strategic Adjustments - Shiseido announced a two-year mid-term plan, "Action Plan 2025-2026," focusing on restructuring and enhancing brand performance [24][25] - The company is undergoing leadership changes, particularly in the Americas and travel retail sectors, to address declining sales [24][25] - The merger of travel retail and China business units aims to create a more flexible and consumer-centric business model [24][25]