Shiseido's cosmetics sales dip 0.8%
Domestic sales falter but international markets rally
Cosmetics sales by the Japanese group Shiseido fell 0.8% to £2.6bn in the six month period ending 30 September this year. Domestic sales fell 3.2% to about £1.4bn. While the Japanese domestic market put on some modest signs of a recovery, sales were not helped by weak economic sentiment and the strong yen. Positive growth came from cosmetics markets in the Americas, Asia and - despite the eurozone crisis - in Europe.
Operating income at group level was down 61.2%, pushed by lower sales in Japan and marketing costs in Japan and abroad. Net profits dropped 44.8% to some £390m.
The Shiseido brand and the Nars makeup brand performed well in North and South America. Sales in Asia were driven by the Aupres premium line in China together with Pure & Mild, a dedicated brand for specialty outlets. Sales also rose in Thailand. Positive growth was also reported on the domestic market with OTC sales in department stores helped by good performances from the global Shiseido brand. OTC sales growth in drugstores featured the Elixir Day Care Revolution beauty essence and Aqualabel Special Gel Cream. Demand for body care products including deodorants and sunscreens was affected by poor weather in June and July. Shiseido says it expects growth in the European cosmetics market to remain weak with some risks in the Americas region owing to the poor employment environment. Growth in China is on a downward trend as economic growth falters. Uncertainty prevails in China, notably about consumer attitudes to Japanese products. However, sales growth in global business is forecast with confidence in the second half of fiscal 2012.
