FY2020 will be ‘severely impacted’ by COVID-19, Shiseido warns
THE WHAT? Shiseido has published its results for the second quarter of the year and it doesn’t look good for the Japanese cosmetics giant. Sales plummeted 34.4 percent yoy to ¥190.9 billion, Shiseido said, despite impressive growth in the e-commerce channel and a solid recovery in China prestige.
THE DETAILS Indeed, all regions save China lost ground, with net sales down 42.2 percent in Japan (like-for-like), -34.8 percent in Asia Pacific, -30.4 percent in the Travel retail unit, diving 65.6 percent across the Americas and dropping 34.7 percent in EMEA.
Net sales were also down consistently by brand, save the newly acquired Drunk Elephant and Tory Burch labels.
The brand announced a number of measures designed to rescue the second half of the year, including new launches designed to tackle mask-ne and changed make-up needs caused by the wearing of masks, as well as responding to the heightened hygiene and price awareness caused by the pandemic and the knock-on economic consequences of lockdowns worldwide.
Despite all this, Shiseido revised its forecast for FY2020 downwards, with net profit expected to drop 55.08 percent – and only then assuming that Japan will not declare a state of emergency and there will be no further lockdowns prompted by a second wave of the virus. The company also announced that remuneration would be reduced for its executive leadership from CEO to Corporate Officer level.
THE WHY? Shiseido CEO Masahiko Uotani said in a conference call, per Bloomberg, “The coronavirus has greatly impacted how consumers around the world behave and their values. There’s increased use of e-commerce and obtaining information using digital channels. Also, consumers are only buying what they need and value.”