The shares dipped despite core operating profit of ¥13 billion, which beat the ¥10.4 billion consensus estimate, helped by structural reforms and cost controls. Shiseido also reaffirmed its full-year core operating profit guidance.
Shiseido is also considering shifting away from oil-based inputs for plant-derived materials as the Middle East conflict upends global cosmetics supply chains. It factored in a roughly ¥5 billion hit to core operating profit this fiscal year due to the Iran war.
“Increased sales abroad can compensate for sluggish profit in Asia if consumer sentiment in mainland China remains subdued,” wrote Bloomberg Intelligence senior analyst Catherine Lim. “Shiseido could stay profitable in Japan this year with an enlarged e-commerce business and more unique Japan-only skincare items that appeal to international shoppers to offset the drag from fewer Chinese visitors.”
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