Japanese cosmetics company Shiseido saw a sharp decline in its shares as it revised its earnings guidance for 2023, citing difficulties in its Chinese business. During Monday morning trading, shares dropped by 14% to 4,191 yen.
Shiseido revealed that it expects its net profit for the year to decrease by 47% to Y18.00 billion ($118.8 million), down from its previous projection of Y28.00 billion. Additionally, the company anticipates an 8.2% decrease in revenue, with a new forecast of Y980.00 billion compared to the earlier estimate of Y1.000 trillion.
The weakening performance in China and its duty-free stores were identified as contributing factors to the company’s financial challenges. Shiseido noted that retailers were clearing their inventory, resulting in diminished sales. Moreover, it acknowledged that the economic sentiment in China had deteriorated, leading Chinese consumers to reduce their purchases of Japanese products following the discharge of wastewater from the Fukushima Daiichi nuclear plant in late August. In an effort to address these difficulties, Shiseido plans to incur Y6.0 billion of impairment losses through the restructuring of its plant operations in Osaka.
Over the nine-month period ending September, Shiseido reported a 29% decline in net profit compared to the previous year, amounting to Y20.52 billion, while revenue decreased by 5.3% to Y722.42 billion.
- Wall Street Journal