11.15.23
Japanese beauty and cosmetics giant Shiseido has slashed its previous sales forecast due primarily to weakness in the Travel Retail Business and the China Business, which continue to be affected by retailer inventory adjustments in light of tighter regulations, as well as an ongoing trend of retailers shifting back towards the business model with focus on tourists.
This was compounded by the weakening sentiment towards China’s economy as well as consumer pull back on purchases of Japanese products after the release of a million tons of treated radioactive wastewater from the ruined Fukushima Daiichi nuclear power plant into the Pacific Ocean—a move which the Chinese government has been a vocal opponent of.
Shiseido expects the wastewater release to continue to impact its business into the first quarter of 2024.
It has also cut its revenue forecast by 2% to ¥980 billion ($6.5 billion).
Net sales in the first nine months of fiscal year 2023 declined 5.3% year on year to ¥722.4 billion ($4.8 billion) on reported figures.
Sales in China and the travel retail market both fell around 10% in the third quarter.
This was compounded by the weakening sentiment towards China’s economy as well as consumer pull back on purchases of Japanese products after the release of a million tons of treated radioactive wastewater from the ruined Fukushima Daiichi nuclear power plant into the Pacific Ocean—a move which the Chinese government has been a vocal opponent of.
Shiseido expects the wastewater release to continue to impact its business into the first quarter of 2024.
Adjusted Outlook
The company now expects to achieve a core operating profit of ¥35 billion ($231.5 million) for the year ending 31 December 2023 – a 42% reduction from its previous estimate.It has also cut its revenue forecast by 2% to ¥980 billion ($6.5 billion).
Net sales in the first nine months of fiscal year 2023 declined 5.3% year on year to ¥722.4 billion ($4.8 billion) on reported figures.
Sales in China and the travel retail market both fell around 10% in the third quarter.
