Shiseido Company (4911) Q4 2024 earnings summary

Executive summary

• Core operating profit for 2024 reached ¥36.4 billion, surpassing revised forecasts, but profit attributable to owners was a deficit of ¥10.8 billion due to structural reform expenses and a seller note provision.

• Net sales reached ¥990.6 billion, down 1% like-for-like year-over-year, with Japan and EMEA delivering strong growth, while China, Americas, and Travel Retail faced declines.

• Dividend reduced from ¥60 to ¥40 per share to prioritize strategic investment, financial flexibility, and transformation.

• Structural reforms and cost management delivered benefits, including an early retirement plan in Japan, but were offset by declines in Travel Retail and Americas.

• The "SHIFT 2025 and Beyond" strategy and "Action Plan 2025-2026" were launched to reinforce brand and operational foundations for sustainable profit growth.

Financial highlights

• Net sales: ¥990.6 billion (+1.8% year-over-year); like-for-like sales down 1.3%; core operating profit: ¥36.4 billion (-8.7% YoY); EBITDA: ¥89.6 billion.

• Operating profit dropped to ¥7.6 billion (down 73% YoY); profit attributable to owners: ¥(10.8) billion; basic EPS: ¥(27.06).

• Non-recurring items totaled ¥28.8 billion, including a ¥12.8 billion provision on a seller note.

• Free cash flow was -¥35.3 billion, mainly due to acquisition costs; expected to turn positive in 2025.

• Total comprehensive income: ¥41.1 billion (down from ¥59.5 billion prior year).

Outlook and guidance

• FY2025 net sales forecast: ¥995.0 billion (+0.4% reported, +4% like-for-like); core operating profit: ¥36.5 billion; profit attributable to owners: ¥6.0 billion.

• Operating profit expected to rise 78.2% to ¥13.5 billion; basic EPS forecast: ¥15.02.

• First half sales expected to decline slightly, with high single-digit growth in the second half driven by Japan, EMEA, and Americas recovery.

• Targeting a 7% core operating profit margin by 2026; structural reforms to be completed by end of 2025.

• Additional ¥10 billion marketing investment in 2025 focused on core and next-tier brands.