Shiseido slashed its full-year profit outlook and recognized a ¥46.8 billion ($305 million) goodwill impairment on its Americas business, marking another setback for Japan’s largest cosmetics maker as it wrestles with weak demand across key markets.
The Tokyo-based company now expects a net loss of ¥52 billion ($339 million) for 2025, reversing an earlier forecast for ¥6 billion profit. Revenue projections fell to ¥965 billion from ¥995 billion previously, though Shiseido maintained its core operating profit target of ¥36.5 billion unchanged. The impairment centers on underperforming U.S. operations, particularly Drunk Elephant, the skincare brand Shiseido acquired for nearly $1 billion in 2019. Sales plunged more than 40% in the third quarter as the brand struggles with inventory optimization. Alberto Noe will transition from interim to permanent CEO of the Americas division to oversee turnaround efforts.
Third-quarter results showed Shiseido returned to growth with net sales rising 4% on a like-for-like basis, recovering from earlier declines. China and Travel Retail revenues jumped 8% after three consecutive quarters of contraction, driven by double-digit mainland China expansion and strong performance from Clé de Peau Beauté and NARS brands. Japan sales increased 2% as local brands offset weaker inbound tourist spending.
The company unveiled a 2030 strategy targeting double-digit core operating margins through cost optimization and growth acceleration. Shiseido projects 2-5% average annual revenue growth on a like-for-like basis through 2030, banking on technological innovation across flagship brands including anti-gravity formulations and enhanced UV protection.
Free cash flow reached ¥31.6 billion in the first nine months, rebounding from negative ¥28.7 billion a year earlier, as restructuring delivered ¥21 billion in cost savings. Shiseido aims to generate at least ¥100 billion annually by 2030 to fund investments in key brands and potential acquisitions while maintaining a 0.5x net debt-to-EBITDA ratio.
The company announced approximately 200 employees at global headquarters will participate in an early retirement program costing roughly ¥3 billion in the fourth quarter, completing major initiatives under its Action Plan 2025-2026.
