TOKYO—Shiseido said Friday its first-half operating profit slumped 46.4 percent to 10.93 billion yen, or $106.15 million at average exchange, on a high base and increased expenses.

The beauty giant, which also slashed its full-year targets, said personnel expenses stemming from higher bonus payments in Japan, as well as stepped-up marketing investments overseas bit into its margins for the six months ended Sept. 30. It also cited “problems” at its U.S. distribution center. A spokesman later specified that the company suffered on higher costs related to the integration of two distribution centers, one from Shiseido and one from its Bare Escentuals subsidiary.

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On a net level, one-off gains from the sale of Decléor and Carita brands to L’Oréal S.A., boosted Shiseido’s bottom line. Net profit grew over four and a half times the amount recorded in the same period last year, to 24.63 billion yen, or $239.15 million at average exchange rates.

Shiseido’s first-half net sales grew 1.4 percent to 365.68 billion yen, or $3.55 billion. While Shiseido’s sales in Japan fell 5.1 percent to 172.55 billion yen, or $1.68 billion, overseas sales increased by 8.1 percent to 193.12 billion yen, or $1.88 billion.

Japan’s largest cosmetics manufacturer has said that it is positioning fiscal 2014 as a year of “preparing for drastic reforms” devised by new chief executive officer Masahiko Uotani and set to be put into place in the coming fiscal year.

“In addition to formulating a new long-term vision and a medium-term business plan due to start in the next fiscal period, we are targeting three major priorities: strengthening marketing execution and brand capabilities from the customer’s perspective, reforming our organization and corporate culture, and reinforcing our operational foundation,” the company said.

Shiseido said it cut its full-year forecasts on a variety of factors, including foreign exchange rates, a downward revision of its forecast for sales in China and plans to “optimize store-level inventories” mainly in China.

The company said it now expects net profit to grow 14.7 percent to 30 billion yen, or $275.08 million at current exchange rates. This is down from a previous forecast of 38 billion yen, or $348.44 million.

Shiseido is now predicting a drop of 49.6 percent in operating income, to 25 billion yen, or $229.24 million. This estimate is considerably lower than the previous forecast of 42 billion yen, or $385.12 million.

The company also cut its sales forecast, and is now forecasting growth of 1 percent to 770 billion yen, or $7.06 billion. Previously, the company had predicted sales growth of 2.4 percent to 780 billion yen, or $7.15 billion.

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