Shiseido Company (4911) Q3 2025 earnings summary

Executive summary

• Achieved a return to sales growth in Q3 2025 after structural reforms and cost discipline, despite a net loss from a ¥46.8 billion goodwill impairment in the Americas.

• Major initiatives under Action Plan 2025-2026 and the Global Transformation Committee were completed, including a voluntary retirement program to be finalized by end of 2025.

• Core operating profit for the first nine months exceeded ¥30.1 billion, approaching the full-year target of ¥36.5 billion.

• Free cash flow improved sharply to ¥31.6 billion, outperforming expectations, and the annual dividend was maintained at ¥40 per share.

• EBITDA margin reached 9.8% for the period.

Financial highlights

• Net sales for the first nine months of FY2025 were ¥693.8 billion, down 4% year-over-year; like-for-like sales declined 3%.

• Core operating profit rose to ¥30.1 billion, up 9.7% year-over-year, with margin improving to 4.3%.

• Non-recurring items totaled ¥63.4 billion, mainly from the Americas goodwill impairment and restructuring costs.

• Net loss for the quarter was ¥44 billion; operating profit turned negative at ¥(33.4) billion.

• COGS ratio was 23.2%, stable year-over-year; marketing investment ratio rose to 28.4%.

Outlook and guidance

• Full-year 2025 net sales forecast revised down to ¥965.0 billion, a 2.6% year-over-year decrease.

• Core operating profit forecast at ¥36.5 billion, nearly flat year-over-year.

• Operating profit, profit before tax, and net profit are expected to remain negative due to the impairment loss.

• Free cash flow expected to reach ¥35 billion, above initial forecast; annual dividend forecast unchanged at ¥40 per share.

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