Shiseido, Japan’s leading beauty company, reported mixed financial results for 2025. While profits exceeded expectations, sales fell due to weak demand in China, travel retail, and the underperformance of its U.S. skincare brand Drunk Elephant. The company is now focused on structural reforms and brand repositioning to drive growth in 2026.
Key Highlights
- Core Operating Profit: Rose 22% to ¥44.5 billion, surpassing the target of ¥36.5 billion.
- Net Sales: Declined 2.1% year-on-year to ¥970 billion, impacted by China and travel retail softness.
- Americas Business: Sales dropped 9.5% (like-for-like), with Drunk Elephant sales sliding sharply.
- Goodwill Impairment: ¥46.8 billion loss tied to declining profitability in the U.S. market.
- Recovery Signs: Sales rebounded in the second half of 2025, with Shiseido and Clé de Peau Beauté performing strongly.
- 2026 Outlook: Targeting ¥990 billion in sales and ¥59 billion in operating profit, supported by reforms and premium brand growth.
Analysis
Shiseido’s 2025 results reveal a paradox: strong profit growth despite declining sales. The impairment linked to Drunk Elephant highlights the brand’s struggle in the U.S., where competition and consumer shifts have eroded its momentum. However, Shiseido’s resilience in Japan and other regions, combined with structural reforms, suggests cautious optimism for 2026.The key challenge remains repositioning Drunk Elephant while leveraging Shiseido’s premium portfolio globally. Success in this area will determine whether Shiseido can sustain growth and strengthen its international presence.
Conclusion
Shiseido’s 2025 earnings underscore both strength and vulnerability. The company’s disciplined management drove profit growth, but sales decline and Drunk Elephant’s struggles remain pressing issues. With reforms underway and premium brands showing resilience, 2026 could mark a turning point for Shiseido’s global strategy.
Reference
https://corp.shiseido.com/en/ir/pdf/ir20260210_244.pdf
https://cosmeticsbusiness.com/shiseido-sales-sink-in-q3-as-drunk-elephant-lags
https://fashnfly.com/2025/05/shiseido-earnings-decline-8-5-drunk-elephant-sales-slide-65/