Shiseido Company (4911) Q3 2025 earnings summary

Executive summary

• Achieved a return to growth in Q3 2025, with sales momentum improving after prior volatility, driven by structural reforms, innovation, and improved brand performance.

• Completed major global transformation initiatives, including a voluntary retirement program, with all actions on track for completion by end of 2025 and JPY 25 billion in benefits expected by 2026.

• Core operating profit rose to JPY 30.1 billion (+9.7% YoY), exceeding initial targets, despite a net loss from a JPY 46.8 billion non-cash goodwill impairment in the Americas.

• Midterm strategy targets above-market growth, sustainable profitability, and double-digit core operating margin by 2030, focusing on brand value, operational optimization, and sustainable value creation.

Financial highlights

• Cumulative net sales for the first nine months of FY2025 were JPY 693.8 billion, down 4% year-over-year (like-for-like -3%), mainly due to lower sales in China, travel retail, and Americas.

• Core operating profit reached JPY 30.1 billion, up JPY 2.7 billion or 9.7% year-over-year, with margin improving to 4.3%.

• Non-recurring items totaled JPY 63.4 billion, mainly from a JPY 46.8 billion goodwill impairment in the Americas and structural reform expenses.

• Net loss for the period was JPY 44 billion; free cash flow improved to JPY 31.6 billion, exceeding expectations.

• EBITDA for Q3 YTD was JPY 67.9 billion, up 1% year-over-year; EBITDA margin reached 9.8%.

Outlook and guidance

• Full-year 2025 net sales forecast revised down to JPY 965.0 billion (-2.6% YoY), with core operating profit target at JPY 36.5 billion maintained.

• Net profit, operating profit, and profit before tax expected to remain negative due to the impairment loss.

• Free cash flow for the year expected to exceed initial expectations; annual dividend forecast unchanged at JPY 40 per share.

• Targeting core operating margin above 10%, ROIC above 10%, ROE above 12%, and free cash flow exceeding JPY 100 billion by 2030.