Shiseido’s full-year profit will fall short of expectations as the Japanese cosmetics firm struggles in the face of lackluster Chinese demand.
The company said Monday it expects core operating profit of ¥36.5 billion ($240 million) for the 2025 fiscal year, missing the ¥41.91 billion forecast by analysts. Net income may reach ¥6 billion, compared with an estimate of ¥28.96 billion.
The disappointing outlook, which came alongside a surprise fourth-quarter loss, shows the challenges facing consumer brands as Chinese shoppers rein in their spending.
Demand for Shiseido in China had previously cratered due to concerns about the release of treated radioactive water into the ocean from the Fukushima No. 1 nuclear power plant. Shiseido is now dealing with extended weakness in the consumer economy in China as a yearslong property slump dents confidence.
"China’s cosmetics market suffered a prolonged downturn, weighed down by a decline in consumer spending and rising household savings amid worsening economic sentiment,” Shiseido said in its earnings report. The duty-free retail market including the Chinese island of Hainan also faces challenges, it said.
Revenue and profit in China and travel retail businesses are expected to decline year on year. In the Japanese market, the company said it will look to product launches and price increases to boost profitability.
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