Japanese beauty giant Shiseido has reported lagging half-year results.
Net sales at the Japanese brand owner declined 7.6% to ¥469.8bn, brought down by weak trading in China and travel retail, as well as plummeting sales at Drunk Elephant.
This was offset slightly by core operating profit increasing to 21.3% to ¥23.4bn as global-wide cost management and structural reform benefits began to pay off.
Drunk Elephant remains a sticking point for the Japanese beauty conglomerate, as sales sank 57% in H1 and 43% in the second quarter of trading.
This had a notable impact on Shiseido’s American operations, with half-year sales dropping 9% compared with the same period last year.
It follows a challenging year for Drunk Elephant, which saw sales decline 25% in 2024.
The prestige skin care brand’s hurdles were attributed to “temporary declines in production and shipments in the first half of the year” in 2024.
Shiseido stated it is “striving for a swift turnaround” for Drunk Elephant in its Q1 2025 financial report.
However, in its half-year update, the brand owner said it anticipates a continued “lacklustre performance” for the remainder of 2025.
Shiseido stated there was a “lack of targeting based on clear customer understanding” in a reassessment of the challenges plaguing the skin care brand.
It also identified “unclear brand values” and a “lack of differentiation from competitors through breakthrough innovation”.
Shiseido remains committed to supporting the business and outlined its plans to shore up the embattled business in 2025, including cleaning up stock and re-clarifying value creation.
The Japanese beauty giant is eyeing a “brand reset campaign” in 2026 that focuses on product strengths and merchandising, while also reassessing its overall brand potential.
Despite Drunk Elephant’s disappointing performance, Shiseido’s core brand portfolio saw gains during the first half of the year.
Make-up brand NARS Cosmetics reported a 7% sales increase in Q2 and 2% for H1, while luxury Japanese beauty brand Clé de Peau Beauté saw 3% gains in both Q2 and H1.
Shiseido’s self-name brand fared worse, with half-year sales down 4%.
The H1 update follows Shiseido’s Chairman of EMEA Region, Franck Marilly, announcing his resignation in May 2025 for “personal reasons”.
This came after Shiseido’s CEO for the Americas region, Ron Gee, also resigned in April 2025.
Alberto Noé, EMEA CEO, has been named interim leader of the region on top of his current role in place of Gee.
Shiseido recently undertook a shake-up of its business, merging its travel retail and China operations.
The restructuring saw the retirement of its travel retail CEO Philippe Lesné.
China CEO Toshinobu Umetsu was named leader of the newly combined units.
The move was part of the group’s broader transformation plan to revive flagging sales.
This is centred around three objectives – reinforcing the brand’s foundation, rebuilding its profitability and enhancing operational governance.
Related content:
- Analysis: ‘Sephora Kids’ is not to blame for Drunk Elephant’s woes, chasing virality is
- Shiseido Q1 disappoints as Drunk Elephant drags down sales
- Shiseido stock rallies following 5.3% stake purchase
- Shiseido Americas CEO Ron Gee departs amid sales slowdown
- Shiseido merges travel retail and China operations to better respond to ‘volatile market conditions’
- Shiseido’s annual profits plummet 73.1% amid sluggish market in China