Shiseido Products

TOKYO  Shiseido said Friday that its net profit, operating profit and sales all reached record highs in its most recent fiscal year. Its net profit more than doubled compared to a year earlier, due largely to a low comparative base resulting from an extraordinary loss related to Bare Escentuals in the previous fiscal year. Sales and operating profit in the period under review also grew.

Net profit for the 12 months ended Dec. 31 totaled 61.4 billion yen, or $559 million at current exchange, up from 22.75 billion yen in the previous year.

Operating profit grew by 34.7 percent on the year to 108.35 billion yen.

“This was mainly due to an increase in the operating margin accompanying the growth in sales and improvement in the cost structure due to strong performance of highly profitable prestige brands, among other factors,” Shiseido said.

The company saw yearly net sales growth of 8.9 percent, totaling 1.09 trillion yen.

“The prestige brands in which the company has increased strategic investment drove overall results,” the company said. “This represents organic growth of 14 percent year-on-year excluding the impact of the sale of Zotos International Inc. and other factors.”

As a part of its mid- to long-term strategy, Shiseido has shifted its focus to be more consumer-facing, has invested in marketing its prestige brands, and has implemented cross-border marketing activities across Asia. Its efforts are paying off in the majority of its business segments. The group saw particularly strong growth in the travel retail business, in which sales were up by 34.7 percent on the year, totaling 87.62 billion yen. China also saw strong sales growth of 32.3 percent, to 190.8 billion yen.

“In the China business, the strong performance of prestige brands such as Shiseido, Clé de Peau Beauté, Ipsa and Nars continued. Sales of the Made in Japan cosmetics brands Elixir and Anessa increased substantially,” the company said. “E-commerce sales recorded strong growth from the rollout of digital marketing and stronger collaboration with major local Chinese online platforms, in addition to an aggressive launch schedule for products in the prestige and cosmetics categories.”

Sales of Shiseido’s Americas business contracted by 1.8 percent to 131.73 billion yen. As it continued its shift toward a more consumer-centric focus, its professional business saw a decrease in sales of 57.6 percent, totaling 20.32 billion yen.

Shiseido also released guidance for the current fiscal year, ending Dec. 31. The company expects net profit will increase by 23 percent to 75.5 billion yen. It predicts operating profit will gain 10.8 percent to total 120 billion yen.

Shiseido is predicting yearly sales growth of 7 percent, coming in at 1.17 trillion yen.

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