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Shiseido Posts Higher Nine-Month Profit and Sales

Strategy shifts and marketing investment are paying off for Japan's largest cosmetics company.

TOKYO Shiseido said Thursday that its nine-month profit and sales both grew, thanks to ongoing strategy changes and a shift to a more consumer-oriented focus. In order to speed up sales growth, it is accelerating digitization, developing new businesses and creating new value through innovation, while continuing to invest in marketing activities.

The company’s net profit for the nine months ended Sept. 30 reached 64 billion yen, or $564.82 million. In the same prior-year period, it posted a loss of 19.96 billion yen, due to an impairment loss related to Bare Escentuals.

Japan’s largest cosmetics company said its operating income for the period increased by 43.5 percent to 101.41 billion yen. Its nine-month net sales were up by 10.2 percent to 805.76 billion yen.

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“The overall growth in net sales was led by the prestige brands segment, where we are continuing to strategically strengthen investment,” Shiseido said in a release. “On a regional basis, we also engaged in strategic cross-border marketing aimed mainly at Chinese consumers across the entire Asian region, spurring growth in China and travel retail.”

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Sales in each of Shiseido’s business segments except the professional business, which it is moving away from, posted gains. The largest growth came from its travel-retail business, where sales increased by 38.2 percent to 67.26 billion yen. In China, sales were up by 33.4 percent to 140.54 billion yen. The Americas market segment posted the smallest growth at 0.5 percent, or 2.2 percent in local currency terms. Sales there totaled 94.56 billion yen.

Shiseido left unchanged its guidance for the fiscal year ending Dec. 31. The company is expecting its net income will nearly triple the previous year’s figure, coming in at 67 billion yen. It is forecasting its yearly operating profit will gain 36.8 percent, to total 110 billion yen. The company predicts its sales will reach 1.09 trillion yen, representing year-on-year growth of 8.5 percent.

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