Core Viewpoint - Shiseido has significantly lowered its earnings forecast, expecting a consolidated net loss of 52 billion yen for the fiscal year 2025, primarily due to asset impairment losses from underperforming acquired American brands [2][4]. Financial Performance - For the fiscal year 2025, Shiseido anticipates a consolidated net loss of 52 billion yen, a substantial downgrade from a previous forecast of a profit of 6 billion yen, marking the largest loss in the company's history [2]. - Revenue for the fiscal year 2025 is projected to decrease by 3% year-on-year to 965 billion yen, falling short of the earlier estimate of 995 billion yen [4]. - For the first nine months of fiscal year 2025, the company reported a loss of 43.9 billion yen, compared to a profit of 75.4 million yen in the same period last year [4]. Asset Impairment Issues - The primary reason for the asset impairment in the U.S. business is the underperformance of the skincare brand "Drunk Elephant," acquired in 2019 for approximately 90 billion yen [6]. - Shiseido has faced asset impairment issues from previous acquisitions, including Bare Escentuals and Laura Mercier, leading to significant losses in past fiscal years [6][7]. Strategic Changes - Shiseido plans to implement layoffs and close its research facility in Singapore as part of its restructuring efforts, aiming for a total of over 70 billion yen in core operating profit by fiscal year 2026 [8]. - The new mid-term management plan for fiscal year 2030 emphasizes a shift in brand management strategy, with a focus on centralized decision-making from Japan's headquarters and a unified global brand strategy [8]. Market Challenges - The company faces increasing criticism for optimistic earnings forecasts and governance issues, with its stock price significantly declining from a peak of 9,250 yen in 2018 to around 2,000 yen recently [9]. - The competitive landscape in the premium cosmetics market is intensifying, raising questions about Shiseido's ability to effectively implement its brand rebuilding and market expansion strategies [9].