Shiseido sales rise 5.5% in first quarter, profits up 16.1%

Strong performance for the prestige category and momentum in China drove growith

Japanese group Shiseido saw its first-quarter organic sales rise 5.5% to ¥273.6bn ($2.49bn), buoyed by the Prestige and Fragrance categories and strong performance in China. In reported terms, sales grew by 3.7%. 

Net profits rose 16.1% from the same quarter of 2018 to ¥33.5bn ($305.8m), owing mainly to a decrease in tax expenses related to a US-based subsidiary.

The group said its Prestige category grew 8% on a currency-neutral basis, with brands Shiseido, Ipsa and Laura Mercier logging double-digit growth. Sales in the Fragrance business climbed 11% in currency-neutral terms, on the back of double-digit growth for Narciso Rodriguez and solid performance for Dolce & Gabbana. The Cosmetics category performed more modestly, rising 1% year-over-year, while the Personal Care business saw sales decline 4%.

In China, sales rose 15% in reported terms to ¥52.5bn ($479.4m), with the Prestige category gaining market share in mainland China. The Shiseido and Clé de Peau Beauté brands saw sales rise significantly. Ipsa and Nars also performed well for the quarter. In the Cosmetics category, sales for the Elixir and Anessa brands saw strong growth, but China-focused brands such as Aupres did not meet expected targets. E-commerce sales were strong for the quarter and showed growth in all categories.

Sales in Japan declined 0.6% to ¥114bn ($1.04bn) amid a domestic cosmetics market Shiseido said was flat. The group logged solid growth for its core Shiseido, Clé de Peau Beauté and Elixir brands.

In Asia Pacific, quarterly reported sales rose 11% year over year to ¥18.9bn ($172.5m), with the Shiseido, Nars, Laura Mercier and other prestige brands driving growth. Anessa and Dolce & Gabbana also performed strongly in the region. Shiseido said it achieved market-share growth in Taiwan, Korea and Thailand, which account for 70% of its Asia Pacific sales.

In the Americas region, sales declined 0.5% year-over-year in reported terms to ¥28bn ($255.6m), impacted by sluggish sales and shuttered store locations for bareMinerals, underperformance by Nars and a weak US market in certain categories. However, Dolce & Gabbana and Narciso Rodriguez fragrances saw good momentum during the quarter.

Sales in the EMEA region fell 0.1% on a reported basis to ¥25bn ($228.3m), but prestige brands such as Shiseido and Laura Mercier performed well. Sales in the UK and France fell, but rose in Italy and Spain.

In Travel retail, sales climbed 9.3% to ¥23.4bn ($213.7m), with Shiseido and Anessa showing strong growth, mainly in Asia. Clé de Peau Beauté sales fell during the quarter, mainly due to supply issues for certain products.