Japanese cosmetics giant Shiseido reported a net loss of 10.8 billion yen (about USD 71 million) for 2024, mostly due to a slump in sales in the Chinese market.
It was the firm’s first net loss since 2020 and the COVID-19 pandemic.
While it falls sharply (-73% compared to 2023), the operating result remains positive at 7.58 billion yen (about USD 49.9 million), compared to 28.13 billion yen in the previous year.
The group’s global sales rose 1.8 percent to 990.5 billion yen, or USD 6.5 billion, driven by a strong performance in Japan amid a surge in tourist arrivals.
In contrast, sales in China, a key market for Shiseido, fell 4.6% on a like-for-like basis, excluding the impact of foreign exchange and business transfers.
“China’s cosmetics market suffered a prolonged downturn, weighed down by a decline in consumer spending and rising household savings amid worsening economic sentiment,” the Japanese company said in a statement.
This was further exacerbated by significant restructuring costs associated with the closure of outlets in Japan and China and to job redundancies.
Shiseido anticipates China’s economic downturn will persist into 2025. The company will therefore further reduce costs and focus on products with higher profit margins in Japan and Europe.
The company said it would also consider a review of its operational structure and the role of the Chinese market.
“We think things will bottom out this year and that we will be able to achieve mature growth from then on,” Shiseido President Kentaro Fujiwara said of the China market at a post-earnings briefing with reporters.
The company targets a net profit of about 40 million dollars for the current year.
