Shiseido cautious about 2022 forecast

On Thursday, Japanese cosmetics group Shiseido confirmed its prudent forecast for the 2022 financial year, stating it is “hard to quantify precisely” the impact on its business of the pandemic and of geopolitical tensions.

Shiseido mentioned in a press release the “current market uncertainties resulting from the pandemic, increasing geopolitical tensions, and fluctuations in exchange rates and commodity prices,” and said it was examining several scenarios, postponing the publication of new forecasts.

As a result, the group’s February forecast has remained virtually unchanged, only marginally adjusted owing to the adoption of IFRS accounting methods.

For 2022, Shiseido is predicting a net profit of JPY 44 billion (€326.7 million), equivalent to a 6.2% decrease on an annual basis.

Excluding exceptional items (restructuring costs, depreciations, etc.), Shiseido is forecasting an operating profit of JPY62 billion, which would represent a 45.7% increase over the previous year, and sales for JPY1.075 trillion (down 6.4%), or €8 billion at current rates.

Shiseido’s Q1 results were marked by disappointing sales in its two main markets: Japan, where restrictions imposed for the Omicron variant put a brake on household expenditure until mid-March, and China, whose zero-Covid policy slashed consumption.

However, Shiseido’s sales rebounded in Europe and the USA, as well as in the travel retail channel (duty-free shops, chiefly at airports).

In Q1, Shiseido recorded a net profit of JPY4.4 billion (€32.7 million), as opposed to the net loss of JPY11.1 billion posted the previous year. The latter was mainly due to the expiry of Shiseido's license agreement for the perfumes of Italian luxury label Dolce & Gabbana.

The group’s Q1 operating profit also stood at JPY4.4 billion, and its sales virtually stagnated at JPY234 billion (€1.7 billion at current rates), down 1.3% on an annual basis.