TOKYO — Shiseido Group reported Thursday that first-half net profit slipped 8.6 percent to 9.83 billion yen, or $83.7 million at average exchange, but the Japanese cosmetics giant said sales from overseas, a key growth area, increased to almost 31 percent of revenues.
Total sales increased 5.1 percent to 347.4 billion yen, or $2.95 billion, on a consolidated basis compared with the same period a year ago. Domestic sales were up 0.7 percent, and overseas sales grew 16.7 percent, to 106.5 billion yen, or nearly $906 million, in the six-month period ended Sept. 30.
“We achieved a double-digit increase in income from operations, up 13.6 percent to 25.83 billion yen [or $219.6 million], reflecting higher sales, which offset increased personnel expenses,” Shiseido said in a statement. “We reported an extraordinary loss…on domestic and U.S. subsidiaries and paid higher corporate taxes, causing interim net income to decline.”
Overseas revenues accounted for 30.7 percent of total sales for the period compared with 27.6 percent a year ago. Sales in the Americas rose 7.7 percent on a yen basis, while sliding 0.8 percent, to 24 billion yen, or $204.1 million. Sales in Europe went up 5 percent on the yen and 0.4 percent in local currencies to 39.57 billion yen, or $336.5 million, and sales in Asia/Oceania increased 37 percent on the yen and 24.8 percent in local currencies to 42.97 billion yen, or $365.4 million.
“Based on local currencies, sales in the Americas declined slightly as some brands struggled,” Shiseido said. “By contrast, sales in Asia grew significantly, especially in the rapidly growing Chinese market. The yen depreciated against each currency, so after conversion into yen, sales increased in each region.
“Growth at the prestige end of the cosmetics market was slow, impacted by factors including nonseasonal weather. Mega line growth in the self-selection [channel], however, allowed us to boost overall sales of the domestic cosmetics sector,” the firm noted.
Sales within Shiseido’s overseas cosmetics business unit rose 16.8 percent. “During the period, [overseas] cosmetics sector sales grew steadily in each region, led by China, our key overseas market,” Shiseido said. “Demand for mainstay Shiseido brand products was high, as was demand for fragrances from Beauté Prestige International, Nars, and other non-Shiseido brands,” the company said, adding that “professional sector sales to salons were up, with key contributions from Zotos International Inc.”