Shiseido returns to profit in Q3 26, but Drunk Elephant records ‘severe underperformance’

By Alessandro Carrara | Published: 11-Nov-2026

Despite returning to profit, Drunk Elephant global sales decreased 23% during the quarter after recording ‘some severe underperformance’ in US e-commerce sales

Shiseido returned to profit in Q3 2026 after net sales jumped 7% to ¥741.1bn for the nine months ended September, however, Drunk Elephant’s global sales decreased 23% during the quarter.

The parent company’s return to profit was driven by skin care brand Clé de Peau Beauté and the Japanese beauty giant’s own brand Shiseido, which led to core operating profit rising 124% to ¥67.5bn from ¥30.1bn a year earlier.

Core operating profit represented 9.1% of net sales, compared with 4.3% in the same period of 2025.

Profit before tax was ¥65.3bn, compared with a loss of ¥32.5bn compared with the same period last year, while income tax expense increased to ¥21.2bn.

“First, we have seen an improvement in our sales growth momentum,” said Ayako Hirofuji,

Shiseido CFO, during an investor relations call held on 10 November.

“After a 3% decline in Q1, we recorded a 2% growth in Q2 and 3% in Q3, bringing our year-to-date (YTD) growth to 1%, a shift into positive territory.

“Growth has been driven by our core brands such as Clé de Peau Beauté and Shiseido, as well as new brands like Max Mara and new product launches, including a new Total V Cream from the ELIXIR line.

“Our focus on core brands and our commitment to creating value through our innovation are now beginning to reflect in our sales performance.”

Shiseido CEO Kentaro Fujiwara’s annual pay has been revealed by Cosmetics Business. Find out more here.

Despite returning to profit, skin care brand Drunk Elephant’s global sales decreased by 23% during the quarter, from the decline of 14% in Q2.

This dragged down e-commerce sales in the US in Q3, to a low single-digit-to-mid-single digit negative.

Hirofuji added: “Brand-wise, Dr. Dennis Gross Skincare [and] Drunk Elephant recorded some severe underperformance. That is the detractor.”

This follows Drunk Elephant unveiling a new campaign and brand direction in January 2026 in an attempt to shrug off its association with 2024’s ‘Sephora Kids’ drama.

This saw tweens rampaging through US Sephora stores in January of that year, trying and buying goods while leaving chaos in their wake, including Drunk Elephant’s high-active concentrate formulations.

The resulting fallout and identity crisis triggered multiple consecutive quarters of declining sales, dragging down income at Shiseido in the process.

Shiseido’s travel retail segment also saw a bumper quarter of trading after net sales increased by 1.2% to ¥268.5bn.

The Japanese conglomerate expects the impact of retailer restructuring in Mainland China to ease gradually.

Hirofuji added: “Helped in part by advanced shipments in anticipation of a market recovery in Mainland China, net sales turned positive on a cumulative basis.

“While the recovery pace in travel retail and Mainland China is slower than anticipated, consumer purchases in Hainan Island continue to grow, and the business as a whole is on an improving trend.

“We will continue to monitor in-store sales trends and flexibly control shipments accordingly.”