TOKYO — Shiseido said Wednesday that net income for the first half of the year more than doubled compared with the same period in 2017, thanks to stronger sales and the effects of increased marketing investment.
For the six months ended June 30, Japan’s largest cosmetics company posted net income of 47.67 billion yen, or $428.3 million at current exchange rates. This represents more than a doubling of profits compared with the same period last year, when net profit was 18.81 billion yen.
First-half operating income also more than doubled, totaling 71.11 billion yen this year, over last year’s 34.67 billion yen.
“As marketing investment was proactively increased, [we achieved] strong sales of the highly profitable prestige brands and other products in the Japan, China, travel retail and other businesses,” Shiseido said.
Net sales for the period grew by 12.8 percent to 532.6 billion yen. Last year the company’s sales in the first half came to 472.11 billion yen.
Shiseido saw sales growth in the majority of geographic regions in which it operates. While sales in the Americas slipped 0.6 percent to 58.84 billion yen, in local currency terms sales increased by 1.8 percent.
In Japan, sales were up 14 percent to 238.53 billion yen. In China, net sales grew 35.3 percent to 92.9 billion yen. And in the Asia-Pacific region, sales gained 17 percent to 33.34 billion yen. But the biggest growth was seen in the travel retail market, where sales increased 40.3 percent to 45.26 billion yen.
“As we pursued selection and concentration of our businesses and brands as well as proactively increased investment in eight key brands, these brands contributed 66.2 billion yen in overall net sales growth,” Shiseido said. “On a regional basis, we engaged in strategic cross-border marketing aimed mainly at Chinese consumers across the entire Asian region, spurring growth in Japan, China and travel retail.”
This year marks the first in Shiseido’s current three-year plan, the second phase of its Vision 2020 strategy and one that aims to accelerate growth.
“To speed up sales growth, we are accelerating digitalization, developing new businesses, and generating new value through innovation as we continue substantial marketing investment with a focus on our prestige brands,” the company said. “Moreover, we believe our people are the source of all value creation and are actively investing in them.”
Shiseido also raised guidance for the full fiscal year ending Dec. 31. It now expects net income to nearly triple compared with 2017, totaling 67 billion yen. This is up from a previous forecast of 54 billion yen. The company’s net income in 2017 was 22.75 billion yen.
The beauty company is now predicting yearly operating profit will grow by 36.8 percent to 110 billion yen. Its previous forecast was for 11.9 percent growth to 90 billion yen.
Net sales are now forecast to gain 8.5 percent to total 1.09 trillion yen. Shiseido previously predicted growth of 2.8 percent, to 1.03 trillion yen.
Shiseido, which until now has relied heavily on its expertise in skin care, recently revealed that it has revamped its namesake makeup line, with an entire roster of new products, as well as new packaging and a new marketing campaign.