TOKYO — Shiseido and Kao have slashed their full-year net profit forecasts by 17 percent and 13 percent, respectively, warning that market conditions are deteriorating.
Shiseido’s net profit for the nine months ended Dec. 31 dropped 18.7 percent to 21.3 billion yen, or $207.3 million. Sales slid 3.4 percent to 518.5 billion yen, or $5.04 billion.
“Both Japanese and overseas economies showed clear signs of retreat, while conditions surrounding markets for consumable goods became more difficult,” stated Shiseido. The company posted extraordinary losses of 6.9 billion yen, or $67.1 million, due to restructuring expenses and other costs related to the closure of its fashion retailing chain The Ginza.
Nine-month sales in Shiseido’s core Japanese market dropped 5.9 percent to 325.1 billion yen, or $3.17 billion, while international sales increased 1.1 percent in yen terms and 5.9 percent in local currency terms to 193.4 billion yen, or $1.88 billion.
The company said its recently revamped skin care line sold well in China and helped propel double-digit growth for the cosmetics business in Asia but conditions were more challenging elsewhere.
“Overseas, the cosmetics markets in industrialized countries felt the effects of the worldwide economic slowdown,” the company said. Shiseido cut its forecasts for the fiscal year ending March 31. The group now sees profit coming in at 30 billion yen, or $333.8 million, compared with an earlier forecast of 36 billion yen, or $400.6 million. Sales are seen coming in at 700 billion yen, or $7.8 billion, compared with an earlier forecast of 720 billion yen, or $8 billion.
Meanwhile, Kao said net profit for the nine months ended Dec. 31 rose 0.9 percent to 54.2 billion yen, or $527.1 million, thanks in part to a decision to defer some income tax payments.
Sales inched up 0.4 percent to 1 billion yen, or $ 9.77 billion. On a constant-currency basis, they would have risen 2.4 percent.
Despite cost-cutting measures, the rising prices of raw materials including natural oils, fats and petrochemicals bit into margins, the company said. Operating profit dropped 4.9 percent to 91.4 billion yen, or $888.9 million.
Kao cut its forecasts for the year ending March 31. Net profit is now seen coming in at 60 billion yen, or $667.6 million, compared with an earlier forecast of 69 billion yen, or $767.8 million. Sales are expected to come in at 1.29 trillion yen, or $14.3 billion, compared with a previous forecast of 1.33 trillion yen, or $14.8 billion.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty