TOKYO — Shiseido swung back into the black in the first quarter.
The Japanese beauty giant said Wednesday it posted a net profit of 2.66 billion yen, or $26.87 million at average exchange rates, for the three months ended June 30. That compares with a year-earlier loss of 1.27 billion yen, or $15.9 million.
Sales for the period spiked 8.6 percent to 162.36 billion yen, or $1.64 billion.
The company said its operating income for the three months totaled 6.88 billion yen, or $69.64 million. This compares to an operating loss of 3.02 billion yen, or $37.7 million, last year.
Shiseido attributed the turnaround in profitability to several factors.
“These included a marginal gain stemming from higher net sales, as well as rigorous marketing spending targeting core focal fields,” the company said. “We also pursued comprehensive cost reductions centered on cost structural reforms, and in Japan we reduced personnel expenses, including bonuses and pension costs.”
Shiseido said the Japanese cosmetics market “showed indications of a turnaround,” citing positive macroeconomic factors such as the recent weakening of the yen and Japan’s fiscal policy attacking deflation.
The company’s sales in its home market of Japan edged up 0.1 percent to 82.17 billion yen, or $832.36 million,
The company said the cosmetics markets in the Americas and Asia posted “sustained growth” while conditions were negative in Europe.
Shiseido’s overseas sales grew 19 percent to 80.16 billion yen, or $812.38 million. However, the company noted in its release that much of this growth was due to currency translation and the recently weakened yen.
Shiseido also revised its earnings outlook for the fiscal year ending March 31, 2014. In left its net profit guidance untouched at 20 billion yen, or $203.88 million at current exchange rates, but revised upward its sales and operating profit forecasts.
The company now expects operating profit to grow by 49.7 percent to 39 billion yen, or $397.57 million. It is predicting sales will increase 7.3 percent to 727 billion yen, or $7.41 billion.