Agenda-setting intelligence, analysis and advice for the global fashion community.
Shiseido Co. shares fell to their lowest in eight years after investors were underwhelmed by the company’s plan to counteract a slump in China by boosting growth elsewhere.
Shares fell as much as 8.4 percent — its lowest since November 2016 — in early trading Monday. The stock was trading 7.7 percent down at ¥2,635.5 a piece as of 12:31 p.m. in Tokyo.
The Japanese cosmetics maker Friday set its operating profit margin target at 7 percent in 2026, lower than the 9 percent originally envisioned for 2025. While the newest forecast is still double what its likely to achieve this year, Shiseido is trying to drive growth in Japan and other major markets to compensate for its slump in China.
The market didn’t appear convinced by the plan.
ADVERTISEMENT
The business strategy briefing was negative, Hisae Kawamoto, an analyst at Jefferies, wrote in a note. There could be “investor fatigue” with the company’s structural reforms and it’s hard to say if this measure will help, according to the note.
China is the cosmetic’s company’s most crucial market outside Japan. The company has seen demand for its once-popular cosmetics crater in China, amid tensions between Tokyo and Beijing over Japan’s decision to discharge treated water from the wrecked Fukushima nuclear power plant.
“The market will remain unstable for the foreseeable future,” Chief Executive Officer Kentaro Fujiwara told reporters Friday.
This year, the company offered an early retirement plan to as many as 1,500 employees in Japan, as part of a two-year cost-cutting program meant to save more than ¥40 billion, as well as a different scheme to secure an additional ¥25 billion in savings in 2026.
By Nicholas Takahashi
Learn more:
Shiseido Lowers Full-Year Forecast As China Slump Persists
Shiseido reported on Thursday a 26 percent decline in core operating profit over the first nine months of this year.
