TOKYO — Shiseido Co. Ltd.’s nine-month net profit plunged 62 percent as the Japanese beauty company slashed its full-year forecasts and warned of difficult market conditions in its home country.
This story first appeared in the February 1, 2011 issue of WWD. Subscribe Today.
Shiseido said Monday its net profit for the nine months ended Dec. 31 fell 62 percent to 9.01 billion yen, or $103.98 million at average exchange rates for the period. The company attributed the drop to costs related to the acquisition of Bare Escentuals and other extraordinary items linked to accounting procedure and tax payments.
Sales rose 4.8 percent to 486.97 billion yen, or $5.62 billion, as growth from international markets compensated for slumping sales in Shiseido’s home market of Japan.
Operating profit for the nine months declined 22.3 percent to 25.36 billion yen, or $292.65 million.
The company cut its forecasts for the year ending March 31, stating that it expects the Japanese market to continue to be difficult. Shiseido said it now expects its full-year net profit to come in at 18 billion yen, or $219.09 million, down from October’s estimate of 25 billion yen, or $304.29 million. Sales now are seen coming in at 680 billion yen, or $8.28 billion, from previous guidance of 688 billion yen, or $8.37 billion.
Cosmetics sales in Japan over the nine-month period declined 5.4 percent to 269.20 billion yen, or $3.11 billion. That represents 55 percent of the group’s turnover.
Shiseido highlighted a 22.2 percent jump in international sales to 210.7 billion yen, or $2.43 billion, citing strength in China and other emerging markets. It also said markets in Europe and North America continued their recovery.