TOKYO — Shiseido Group saw higher profits, but slightly lower sales for the first half of the year.
This story first appeared in the October 31, 2008 issue of WWD. Subscribe Today.
Net profit rose 55.3 percent to 20.1 billion yen, or $189.5 million at average exchange for the six months ended Sept. 30. Sales slid 1 percent to 359.4 billion yen, or $3.39 billion.
Proportionally lower costs and a lower tax rate helped boost the beauty giant’s bottom line, according to the firm, which said it benefited from a change in its product mix and a move to shift some of its expenses to the third quarter and beyond.
Shiseido confirmed its full-year profit targets, but cut its sales forecast, warning that market conditions are deteriorating. The company is forecasting a 1.5 percent gain in net income to 36 billion yen, or $369.8 million, and a 2.4 percent rise in operating income to 65 billion yen, or $667.7 million. Sales are seen declining 0.5 percent to 720 billion yen, or $7.4 billion. The original forecast was for sales to come in at 730 billion yen, or $7.5 billion.
“During the term, both Japanese and overseas economies showed clear signs of retreat, while conditions surrounding markets for consumable goods became more difficult,” the group stated.
First-half operating profit rose 5.6 percent to 33.9 billion yen, or $319.7 million, despite some extraordinary losses including business restructuring and impairment expenses related to its withdrawal from the boutique business and the liquidation of its retail subsidiary Shiseido Beautech Co. Ltd.