Shiseido presents exceptional profit numbers

European turnover down, America performs well

In its home territory, Japan, the company suffered a 2.3 % turnover drop because of a VAT increase in the spring of 2014, while the economy is only gradually getting out of its slump. Nevertheless, the sales of its reinvigorated brands Elixir and Maquillage performed well in the final quarter of 2014. Its European turnover also dropped, partly because it sold its Cecléor and Carita brands.

Its worldwide cosmetics turnover growth, up 2.3 % (and even 9.3 % if it is calculated in yen currency) is mainly because of its American performance. BareMinerals and its worldwide Shiseido brand were the outstanding performers over there, while Chinese turnover also grew nicely, particularly its online sales.

The Shiseido group is not only active in the cosmetics branch, but also has restaurants among other things and these other activities combined created a 5.6 % turnover increase.

Subsidiary sales create spectacular profit increase

Its operational income dropped 43.6 % in the first three quarters, because of higher bonuses for its Japanese employees, additional marketing expenses and issues at its American distribution center.

Its net turnover has grown 27.8 billion yen, up an astonishing 66.1 % thanks to the sale of Decléor and Carita to its French competitor L’Oréal.

Reform and Lady Gaga

The company credits its drastic reform in its fiscal year 2014, based on three priorities, for the positive numbers: strengthen the brands’s marketing approach and capacity, reform the organisation and company culture, improve its operational base.

In January, Shiseido signed Lady Gaga as part of its new marketing campaign. 50 selfies of the American pop star, obviously with Shiseido make up, were published in Japanese papers earlier this year.

For its full fiscal year, Shiseido expects a 1.7 % turnover increase compared to its previous fiscal year. Mid-December 2014, the group divulged its long-term strategy and short-term business plan, which will all be implemented at the start of its new fiscal year, in April 2015.