Shiseido reported a sharp rebound in profitability for the first half of 2025 even as sales declined across most markets, with the Japanese beauty giant’s domestic restructuring offsetting persistent challenges in China and the Americas.
The cosmetics maker posted net sales of ¥469.8 billion ($3.16 billion) for the six months through June, down 7.6% from a year earlier. However, core operating profit surged 21.3% to ¥23.4 billion ($157 million) as cost-cutting measures began yielding results.
The divergent trends highlight Shiseido’s uneven recovery. While aggressive restructuring in Japan delivered a dramatic turnaround, with operating profit margins jumping to 13.3% from 4.3% a year ago, the company’s international operations continue struggling. The Americas business posted an operating loss of ¥5.8 billion ($39 million), weighed down by the continued decline of Drunk Elephant, the skincare brand Shiseido acquired for $845 million in 2019.
Shiseido announced plans to cut 300 jobs in the US following continued losses from Drunk Elephant, as the once-buzzy clean beauty brand’s sales have plummeted more than 50% from their peak. The brand’s struggles reflect broader challenges in the competitive US skincare market, where emerging brands and changing consumer preferences have intensified competition.
China, traditionally Shiseido’s most profitable overseas market, remains weak. Sales in the China and Travel Retail segment fell 12.4% to ¥173.9 billion ($1.17 billion), hurt by subdued consumer spending and travel retail difficulties. Core operating profit in the region dropped 15.6% despite cost-reduction efforts.
Chief Executive Kentaro Fujiwara maintained the company’s full-year core operating profit target of ¥36.5 billion ($246 million), citing accelerated structural reforms that are expected to deliver ¥50 billion ($337 million) in cost savings over 2025-2026. The company plans to reduce its workforce by 13% by year-end as part of what it calls its “Action Plan 2025-2026.”
The results underscore the challenges facing international beauty companies as economic uncertainty dampens luxury spending in key markets while heightened competition pressures margins.
