Shiseido posts 62% profits decline
But international sales see strong growth
Shiseido has posted a 62% decline in profits for the year ending 31 March 2011 to €111m due – the company makes clear – to a change in the estimation of product samples and promotional materials within assets, a devaluation loss in securities investment and an "extraordinary loss" linked to the east coast earthquake.
However, group net sales rose 4.1% to €5.8bn and sales abroad increased significantly (+50.2%) as growth recovered in Europe and North America while growth continued in China and other Asian markets. Group sales in Japan fell by over 23% as consumer sentiment remained weak.
Shiseido also says it failed to respond to polarisation in the domestic market towards high-priced and low-priced products. Efforts were made to respond to the market changes but overall sales in the cosmetics sector fell 6%.
The company has said it expects a further rise in group net sales for 2011 and looks forward to continued recovery in Europe and North America.
Operating profits are set to decline despite marginal gains from higher sales. Net profits, in contrast, are set to rise owing to improvements in one-off income sources and on the losses front.