By  on October 31, 2008

TOKYO — Shiseido Group saw higher profits, but slightly lower sales for the first half of the year.

Net profit rose 55.3 percent to 20.1 billion yen, or $189.5 million at average exchange for the six months ended Sept. 30. Sales slid 1 percent to 359.4 billion yen, or $3.39 billion.

Proportionally lower costs and a lower tax rate helped boost the beauty giant’s bottom line, according to the firm, which said it benefited from a change in its product mix and a move to shift some of its expenses to the third quarter and beyond.

Shiseido confirmed its full-year profit targets, but cut its sales forecast, warning that market conditions are deteriorating. The company is forecasting a 1.5 percent gain in net income to 36 billion yen, or $369.8 million, and a 2.4 percent rise in operating income to 65 billion yen, or $667.7 million. Sales are seen declining 0.5 percent to 720 billion yen, or $7.4 billion. The original forecast was for sales to come in at 730 billion yen, or $7.5 billion.

“During the term, both Japanese and overseas economies showed clear signs of retreat, while conditions surrounding markets for consumable goods became more difficult,” the group stated.

First-half operating profit rose 5.6 percent to 33.9 billion yen, or $319.7 million, despite some extraordinary losses including business restructuring and impairment expenses related to its withdrawal from the boutique business and the liquidation of its retail subsidiary Shiseido Beautech Co. Ltd.

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