Japanese beauty giant Shiseido has reported a lacklustre first quarter of trading for 2025.
Net sales at the brand owner declined 8.5% to ¥228.2m (US$1.5m) as softening demand in the US and challenges with travel retail in China impacted its performance.
A “sharp” 65% sales decline from skin care brand Drunk Elephant also dragged down sales in America and led to a 19% slump in income for Shiseido’s US market.
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” last year.
Shiseido stated it is now “striving for a swift turnaround” for the embattled business in its first-quarter 2025 financial update.
Its plans to shore up the brand include driving consumer engagement by educating beauty advisors at retail touchpoints and evolving its in-store merchandising.
Drunk Elephant, founded by Tiffany Masterson in 2013, was at the centre of the ‘Sephora Kids’ drama in 2024.
This saw Gen Alpha teens visiting Sephora stores in the US, buying products such as Sol de Janiero and Drunk Elephant and leaving a mess in their wake.
Nars and Shiseido’s namesake brand also struggled during the quarter, with declines of 2% and 7%, respectively.
Consumer purchases in Japan fared better, however, and maintained a strong momentum despite the overall sales decline due to inventory adjustments by retailers.
Shiseido also provided an update on the increased global tariffs implemented by US President Donald Trump in April and has identified them as a “potential downside risk”.
The company is revisiting procurement sourcing and manufacturing footprint, as well as any additional countermeasures to stave off the increased levies' impacts.
Alongside the lagging first-quarter update, Shiseido’s Chairman of EMEA Region, Franck Marilly, has also announced that he is resigning for “personal reasons”.
This follows Shiseido’s CEO for the Americas region, Ron Gee, also resigning 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:
- 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