Shiseido Company (4911) Q3 2024 earnings summary

Executive summary

• Q3 2024 focused on profit improvement through efficiency and cost control amid challenging travel retail in China, with consolidated net sales for Q3 YTD at ¥722.8 billion, flat year-over-year, and like-for-like sales down 3.1%.

• Japan drove profitability with significant profit increases from reforms and strong core brand growth, partially offsetting declines in other regions.

• Core operating profit declined 25.6% to ¥27.4 billion, mainly due to sharp drops in Travel Retail and China, and profit attributable to owners of parent fell 96.3% to ¥754 million.

• Full-year core operating profit forecast revised down from JPY 55 billion to JPY 35 billion due to weaker-than-expected performance in China, travel retail, and the Americas.

• The company completed the acquisition of DDG Skincare Holdings LLC (Dr. Dennis Gross Skincare) in February 2024 to strengthen its prestige skincare portfolio.

Financial highlights

• Q3 net sales: ¥214.2 billion, down 6% year-over-year; Q3 YTD net sales: ¥722.8 billion, flat year-over-year; like-for-like sales down 3.1%.

• Core operating profit for Q3 YTD was ¥27.4 billion (down 25.6% year-over-year); Q3 core operating profit was ¥8.1 billion with a 3.8% margin.

• Operating profit for Q3 YTD fell 91.5% year-over-year to ¥2.2 billion, impacted by ¥25.2 billion in non-recurring items including restructuring costs.

• Profit attributable to owners was ¥754 million for Q3 YTD, down 96.3% year-over-year.

• EBITDA for Q3 YTD was ¥67.3 billion, down 10.4% year-over-year.

Outlook and guidance

• Full-year 2024 net sales forecast revised to ¥990 billion (up 1.7% year-over-year), with core operating profit expected at ¥35 billion (down 12.2%).

• Profit attributable to owners forecast at ¥6 billion; basic EPS forecast at ¥15.01.

• Year-end dividend forecast maintained at ¥60 per share, but under review.

• Strategic focus for 2025–2026 on building a resilient, profitable structure less dependent on market conditions.

• Segment sales outlook: Japan and Asia Pacific expected to see high single-digit growth; China and Americas low to mid-single digit growth; Travel Retail low teen to high teen % decline.