By  on July 31, 2014

TOKYO — Shiseido Co. Ltd. said Thursday that it posted a first-quarter loss of 1.78 billion yen, or $17.43 million at average exchange rates, on increased tax and personnel expenses.

The company’s operating profit plummeted 80.2 percent to 1.36 billion yen, or $13.33 million for the three months ended June 30. Shiseido said higher personnel expenses stemming from bonus payments bit into its profitability.

Japan’s largest cosmetics company saw its first-quarter sales rise 3.7 percent to 168.38 billion yen, or $1.65 billion.

First-quarter sales from the company’s Global Business unit grew 9.8 percent but lost 1.8 percent in local currency terms. Shiseido said it posted growth in its Chinese business and the Aupres brand performed well. As for the Americas and Europe, the company said Nars sold well but sales of fragrances and bareMinerals products declined.

Shiseido said first-quarter sales at its Japanese cosmetics business lost 3.3 percent. The company said consumers pulled back after April’s sales tax hike, but demand “appears to be recovering with each passing month.”

Since appointing Masahiko Uotani as chief executive officer earlier this year, Shiseido is undertaking major changes in its strategy. This new plan is set to start in the company’s next fiscal period, and will include organizational, operational and marketing reforms.

Shiseido left unchanged its guidance for the 12 months ending Mar. 31, 2015. It expects net income to jump 45.3 percent to 38 billion yen, or $371.15 million at current exchange rates.

The company is predicting that operating income will fall 15.4 percent to 42 billion yen, or $410.22 million.

It forecasts yearly sales growth of 2.4 percent, totaling 780 billion yen, or $7.62 billion.

 

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