By  on April 27, 2007

TOKYO — Shiseido's business was boosted by overseas sales, particularly in China, during the fiscal year ended March 31.

On a consolidated basis, the Japanese beauty giant's operating profits rose 28.6 percent to 50 billion yen, or $428 million at the average exchange rate. Shiseido's net sales increased 3.5 percent to 694.6 billion yen, or $5.9 billion, in the period.

The firm's ordinary income grew 26.8 percent to 53.5 billion yen, or $457 million, due to an increase in profits from operations. Shiseido's net income spiked 75.2 percent to 25.3 billion yen, or $216 million, despite an impairment loss and a restructuring expense.

Shinzo Maeda, president, chief executive officer and representative director of the company, said Shiseido achieved what it had set out to do.

"Although domestic sales edged down slightly, overseas sales surged considerably, driven by the Chinese market," said Maeda, who added the rise in the company's operating profits "was the result of marginal gains owing to overseas sales expansion, as well as cost-reduction efforts."

Shiseido's cosmetics revenues in Japan edged down 1.3 percent to 447.6 billion yen, or $3.8 billion, despite higher sales from its self-select and toiletries products compared with the prior year. Meanwhile, the company's business generated from prestige cosmetics sold through beauty advisers and from health care products languished.

Shiseido launched two "mega" lines and with them achieved the goal of establishing six such collections.

The firm's overseas cosmetics sales rose 14.3 percent to 224.3 billion yen, or $1.9 billion, thanks to steady revenue gains in all regions, especially Asia. The effect of a weaker yen contributed, as well.

In China, Shiseido built a network of 1,700 franchised stores. In October, it introduced the Urara brand created specifically for that channel. For department stores, Shiseido began selling Supreme Aupres, part of the Aupres brand sold exclusively in China.

"Outside of China, we raised our presence in main countries in Europe and in America, while actively advancing our activities in the travel-retail business, centering on airport duty free shops," said Shiseido in a statement.

For the fiscal year ended March 31, 2008, the firm forecasts a 4 percent increase in consolidated net sales to 720 billion yen, or $6.2 billion. It also expects a 16 percent rise in income from operations to 58 billion yen, or $496 million. Net income should gain 30 percent to 33 billion yen, or $282 million.

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