Shiseido revises forecast down


Bare Escentuals acquisition cuts into Shiseido profits

Shiseido has said it now expects annual operating profits for 2010-2011 to turn out 5% lower than an earlier forecast because of costs incurred in the acquisition of US company Bare Escentuals. Shiseido acquired the US enterprise for $1.7bn but this cost had not so far been taken into account in forecasting results. The consolidation of Bare Escentuals is estimated to reduce operating earnings because of an increase of ¥7.5bn in the cost of sales associated with the marking-to-market of the expanded inventory resulting from the deal.

Net sales in the revised forecast for the full year to March 2011 are expected to rise by 9.4% to ¥705bn with operating earnings rising by 0.3% to ¥50.5bn (€460m) compared with the earlier forecast of ¥53bn.