Shiseido Q1 2021: Skin care strategy starts to pay off as sales up 6 percent and profit soars

Shiseido Q1 2021: Skin care strategy starts to pay off as sales up 6 percent and profit soars

THE WHAT? Shiseido has announced its results for the first quarter of fiscal 2021. The J-beauty giant said that all regions, except Japan, returned to growth, resulting in a group sales rise of 6 percent to ¥244 billion. Operating profit increased 67.6 percent yoy to ¥10.9 billion.

THE DETAILS China was by far and away the star of the show with sales soaring in excess of 40 percent, Shiseido said. Asia Pacific delivered sales growth of 6 percent, a considerable improvement on the 13 percent decline experienced in the same period in 2019, and the Americas inched up 7 percent. EMEA saw sales growth of 12 percent and even Travel Retail managed to put on 3 percent. Sales in Japan, however, floundered, dropping 12 percent, thanks to the continued State of Emergency.

In terms of sector, growth was driven by the group’s skin care brands, Shiseido said, with sales of its eponymous skin care line up 22 percent, Cle de Peau Beaute putting on 19 percent, Drunk Elephant rising 30 percent and IPSA swelling 27 percent.

THE WHY? President and CEO, Masahiko Uotani commented, “In 2021, the Shiseido Group launched its medium-to-long-term strategy WIN 2023 and Beyond, reflecting market changes caused by the COVID-19 pandemic. We are currently implementing a global transformation, positioning Skin Beauty as our core business. Amid rapid changes in the external environment, we are building a foundation as a Skin Beauty company and to that end, we are shifting from a focus on topline growth to a strategy that emphasizes profitability and cash flow management. “In the first quarter of the fiscal year 2021, net sales grew in all regions except Japan, up 6.0 percent year on year on an FX-neutral basis. Based on reported figures, net sales increased 7.5 percent year on year to ¥244.0 billion, driven by our skin beauty brands, an area of focused investment, and continued growth of e-commerce, particularly in the prestige category. Operating profit increased 67.6 percent year on year to ¥10.9 billion due to improved margins resulting from stronger sales and appropriate resource allocation in line with market changes, particularly for marketing investments and other SG&A.”