Shiseido Company (4911) Q4 2025 earnings summary

Executive summary

• Achieved core operating profit of ¥44.5 billion in FY 2025, exceeding initial targets with a 4.6% margin, despite a 2.1% year-over-year sales decline.

• Free cash flow reached ¥66.5 billion, driven by working capital improvements, CAPEX optimization, and cost management.

• Loss attributable to owners widened to ¥40.7 billion, mainly due to a ¥46.8 billion goodwill impairment in the Americas.

• Regional diversification and a focused brand portfolio contributed to stable profit growth, with key brands outperforming group average in profitability.

• FY 2026 targets include core operating margin of 7%, ROIC 5%, ROE 7%, and free cash flow of ¥50 billion.

Financial highlights

• FY 2025 net sales were ¥970.0 billion (down 2.1% year-over-year); core operating profit rose 22.4% to ¥44.5 billion.

• EBITDA reached ¥95.2 billion (9.8% margin); non-recurring items included ¥73.3 billion in expenses, notably a ¥46.8 billion goodwill impairment in the Americas.

• Free cash flow improved by ¥101.8 billion year-over-year to ¥66.5 billion.

• COGS ratio improved by 0.6 points to 23.3%; marketing investment ratio rose to 29.3%.

• Basic loss per share was ¥101.83; total assets stood at ¥1,267.3 billion.

Outlook and guidance

• FY 2026 guidance projects net sales of ¥990.0 billion (+2.1%), core operating profit of ¥69.0 billion (7% margin), and profit attributable to owners of ¥42.0 billion.

• Dividend per share planned to increase to ¥60, reflecting confidence in stable shareholder returns.

• JPY 10 billion in structural reform expenses planned for FY 2026, with ¥25 billion in cost reduction effects assured.

• Guidance incorporates negative impacts from Japan-China tensions in Q1, with expected improvement from Q2 onward.

• Launch of “Action Plan 2025-2026” and 2030 Medium-Term Strategy targeting a core operating profit margin of 10% or more by 2030.