Shiseido adopted a resolution on 30 July marking a change at the top, as Kentaro Fujiwara (right) will become CEO next year.

Shiseido’s net sales dropped 1% year-on-year, and core operating profit dropped ¥8.8bn ($50m) yen to ¥19.3bn ($131m), as it experienced significant struggles in China and travel retail.

In EMEA, its focus on skincare and fragrancies drove strong growth, while similar growth in Japan and Asia Pacific from inbound tourists partially offset the steep decline in profits from travel retail and China, which Shiseido attributed to weakening consumer sentiment and changes in the purchasing behaviour of its Chinese customer base.

Travel retail net sales saw a 23% decline yoy, a tale all too familiar for Shiseido; travel retail declined 20% in FY23, with much of that impact coming in the second half of the year.

Japan saw the biggest growth in net sales at 13%, followed closely by EMEA at 12%, and APAC at 6%, while its net sales in America dropped 5% and 7% in the Americas and China respectively.

 Despite the recent slowdown in China, where consumers are pulling back on spending and increasing savings, Shiseido noted high prestige products remained relatively strong, with its Cle de Peau Beaute and NARS ranges outperforming the market.

The retailer said it was continuing to invest in developing brand awareness and enhancing collaborative marketing efforts for its high-function, high-efficacy products, such as Drunk Elephant.

Optimisation station

 The strong headwinds it has faced in China and travel retail have led Shiseido to accelerate its plans for cost reduction and profit boosting, which it said will include the closure of unprofitable doors, and a renewed focus on shoring up its strongest brands through online platforms and OOO touchpoints.

A breakdown of net sales for Shiseido’s H124, which showed significant drop-off in travel retail and China.

These global cost reduction plans are intended to provide a boost of 40bn yen by FY25, and in China particularly the company will focus on growth in Tier 3-5 cities, where it sees a rising demographic of middle-class consumers looking for high-prestige products, but a softening demand for prestige and premium assortments.

Shiseido also recently announced a change in CEO as of 1 January 2025.

At the Board of Directors on November 10, 2022, Kentaro Fujiwara was appointed as a CEO candidate to the position of President and COO, which was announced along with the retirement in December 2024 of Masahiko Uotani. Shiseido noted the two have been working together to complete a successful leadership transition, which the Board adopted on 30 July 2024.

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