Shiseido has seen lacklustre turnover in Q3 2025 after being hit with a one-off impairment cost.
The Japanese beauty giant’s net sales decreased 4% to ¥693.8bn, down from ¥722.8bn compared with the same quarter in 2024, primarily due to declines in China, travel retail and skin care brand Drunk Elephant.
Core operating profit fared better, however, rising 10% to ¥30.1bn, despite the NARS-owner reporting a non-recurring charge of ¥63.4bn.
Shiseido said the charge comprises a “goodwill impairment” loss of ¥46.8bn in the US, structural reform expenses and one-off costs for an early retirement programme at its Global HQ.
In Japan, Shiseido reported more moderate growth on the back of a rising number of foreign visitors to Japan, albeit with a sharp decline in department store channels.
Drunk Elephant’s sales challenges continued in Q3 across the US, EMEA and Asia, set back by lowered production at the embattled skin care brand.
Shiseido has maintained its desire to turn Drunk Elephant around, however, outlining its ambition to improve profitability in the Q3 update.
This will start with the launch of a “disruptive and irreverent” campaign pitch to be released in January 2026.
Shiseido also aims to drive increased engagement through brand ambassadors, partnerships and creator community to “generate advocacy”.
Supporting this is a strategy to regain market leadership through the launch and promotion of “unrivalled” hero products.
Looking ahead, Shiseido has lowered its full-year outlook for 2025 and expects net losses of ¥52bn.
The lacklustre Q3 update follows lagging half-year results for 2025, which saw net sales decline 7.6% to ¥469.8bn.
This was offset slightly by core operating profit increasing to 21.3% to ¥23.4bn as global-wide cost management and structural reform benefits began to pay off.
Shiseido has undertaken a shake-up of its business in 2025, merging its travel retail and China operations.
The restructuring saw the retirement of its travel retail CEO Philippe Lesné, and China CEO Toshinobu Umetsu was named leader of the newly combined units.
The move was part of the group’s broader transformation plan to revive flagging sales.
This is centred around three objectives – reinforcing the brand’s foundation, rebuilding its profitability and enhancing operational governance.
Related content:
- Drunk Elephant continues to drag down Shiseido as half-year sales slump
- Analysis: ‘Sephora Kids’ is not to blame for Drunk Elephant’s woes, chasing virality is
- Shiseido Q1 disappoints as Drunk Elephant drags down sales
- Shiseido stock rallies following 5.3% stake purchase
- Shiseido Americas CEO Ron Gee departs amid sales slowdown
- Shiseido merges travel retail and China operations to better respond to ‘volatile market conditions’
- Shiseido’s annual profits plummet 73.1% amid sluggish market in China