Japanese cosmetics giant Shiseido announced its latest financial forecast on November 10, predicting a net loss of 52 billion yen (approximately 2.4 billion RMB) for the fiscal year ending December 2025. This marks the largest annual loss in the company’s 150-year history, a drastic revision from the previously projected 6 billion yen profit, sending shockwaves through Japan’s business community.
According to released data, Shiseido’s net sales for January–September totaled approximately 693.8 billion yen, down 4% year-on-year. Operating profit turned into a 33.35 billion yen loss, compared to a 2.18 billion yen profit in the same period last year. The company also reported a net loss of 43.9 billion yen for the first three quarters, reflecting significant pressure on its business performance.
The historic loss is mainly due to losses in its U.S. operations, particularly the clean beauty brand Drunk Elephant, acquired for about 90 billion yen in 2019. The brand has suffered sharp revenue declines due to intensifying competition and supply chain issues. Between January and September, its core operating loss widened to 7.5 billion yen, becoming the biggest drag on the group’s performance.
Shiseido has a history of costly write-downs resulting from unsuccessful overseas acquisitions, including Bare Escentuals and Laura Mercier — a pattern indicating a structural flaw in its global M&A strategy. Analysts note that the company has struggled to integrate its overseas brands effectively and failed to achieve synergy, leading to repeated strategic missteps.
To stem its losses, Shiseido plans to close some of its overseas R&D facilities. Additionally, the company unveiled its new mid-term plan toward 2030, under which the global brand strategy will be centrally led from its Tokyo headquarters. The plan includes strengthening financial controls and undertaking major structural reforms.
President Kentaro Fujiwara stated, “Painful structural reforms are necessary for future growth,” though market sentiment remains cautious regarding Shiseido’s ability to reverse its trend of repeated downward revisions. The company’s stock price currently hovers around 2,000 yen, a sharp fall from its peak of 9,250 yen in 2018.
