Shiseido Sales $3.72 Billion in the H1 of 2022
- Chaileedo Press
- Aug 11, 2022
- 3 min read
Updated: Aug 25, 2022
Abstract: Shiseido's sales for the first half of 2022 were approximately $3.72 billion, a decline of approximately 0.4% year on year. China declined about 19.7% year on year, and CHAILEEDO observed that China is the market with the largest sales decline for the Shiseido Group worldwide.
On August 10, China Standard Time, Shiseido Group released its financial results for the first half of 2022, and the data showed that the group achieved sales of about $3.72 billion in the first half of the year, down about 0.4% year-on-year. Its operating profit was about $132 million, up about 180% year-on-year, compared with an operating profit loss of about $173.7 million in the same period of 2021.
Shiseido Group said in its earnings report that the Shiseido Group mentioned in its earnings report that the termination of its beauty collaboration with Dolce & Gabbana led to a $334.5 million rise attributable to owners of the parent in the first half of this year compared to the same period last year, to $122.5 million, turning a loss into a profit. But the outlook for performance remains uncertain due to the lockdown in parts of China affected by the epidemic, the prolonged conflict in Ukraine, soaring resource and energy prices, and significant volatility in financial and capital markets.
By region, China achieved sales of approximately $875.2 million, surpassing Japan for the first time and becoming the Shiseido Group's top market. However, net sales in China declined by approximately 19.7% year-on-year, again the largest decline in sales for the Shiseido Group globally.
In terms of China business, e-commerce had a major contribution to the Group's performance, with the Shiseido Group gaining 9% sales growth in the Chinese e-commerce platform Tmall channel. In its report, Shiseido highlighted the growth of its brand NARS. During China’s "618" Shopping Festival in 2022, sales of the NARS increased by more than 60%, further expanding the brand's market share in China.
On the other hand, the resurgence of the epidemic in China and a series of lockdowns centered in Shanghai caused problems in the supply chain and store traffic, which also seriously affected Shiseido's offline sales in China. Because of declining sales and ongoing marketing investments, the Shiseido Group's core operating profit in China posted a loss of approximately $14.98 million for the reporting period.
By brand, in the first half of this year, brands such as NARS and CPB performed brightly in the global market. Among them, NARS sales rose the most year-on-year, reaching 26%. Meanwhile, Shiseido's fragrance brands also achieved year-on-year growth of 15%. On the other hand, the Shiseido brand, IPSA, Drunken Elephant, Anessa, and other brands saw sales decline in varying degrees. Among them, Anessa had the largest decline of 14%, while Elixir and Drunken Elephant also experienced double-digit declines.
In the financial report, Shiseido's Travel Retail Business (sales of cosmetics and fragrances mainly through airport and downtown duty-free stores) was continuously affected by considerable reductions in international flights and the resulting decline in the number of travelers. However, sales of prestige brands such as SHISEIDO, Clé de Peau Beauté, IPSA, and NARS grew strongly, mainly on Hainan Island in China.
Notably, Shiseido participated in the second China International Consumer Products Expo 2022 in Hainan. At this year's Expo, Shiseido China brought new brands, beauty technologies, and its 19 brands and star products to the expo. For China's Hainan travel retail business, Shiseido has said that with the gradual release of the dividends of various supporting policies for the construction of Hainan's free trade port. New opportunities have been brought to the development of major industries in Hainan and many enterprises and talents have been attracted.
Just yesterday (August 10, China Standard Time), Shiseido China announced that its exclusively funded Ziyue Fund had completed the relevant filing, and the first investment focused on recombinant collagen biomaterials of Jiangsu Trautec Co.
In the earnings report of H1 of 2022, Shiseido Group also specifically mentioned that it will shift its future investments in China to brands and products with higher visibility/higher added value while strengthening the efficacy of eye care products, sun care products, etc. It will actively develop the online channel business to provide consumers with a new brand experience, among other ways to promote sustainable growth in the Chinese market.
Comments