Shiseido (4911): FY2025 Results Summary — Core Operating Profit Up 22% on Structural Reforms, Net Loss on Americas Impairment

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Shiseido Company, Limited (4911) announced its results for fiscal 2025 (January–December 2025) on February 10, 2026. Net sales declined 2% year on year to ¥970.0 billion, while core operating profit rose 22% to ¥44.5 billion — well above the initial target of ¥36.5 billion — as structural reforms and tighter group-wide cost management took hold. Non-recurring items of −¥73.3 billion, including a ¥46.8 billion goodwill impairment loss in the Americas Business, pushed the company to an operating loss of ¥28.8 billion and a loss attributable to owners of parent of ¥40.7 billion. Free cash flow improved sharply to ¥66.5 billion, and the company plans to raise the annual dividend from ¥40 in 2025 to ¥60 per share in 2026.

Note: Shiseido’s fiscal year ends in December. The figures below cover January–December 2025 as presented in the company’s English-language results presentation “2025 Results (January—December) and 2026 Outlook.”

Consolidated Results (Full-Year Actual)

Net sales were ¥970.0 billion, down ¥20.6 billion (−2% year on year; −2% on a like-for-like basis), with the revenue decline driven by China & Travel Retail and Drunk Elephant. Core operating profit increased ¥8.2 billion to ¥44.5 billion (core operating profit margin of 4.6%), lifted by structural reform benefits and tighter group-wide cost management. Non-recurring items totaled −¥73.3 billion, comprising a −¥46.8 billion goodwill impairment loss in the Americas Business, −¥3.1 billion for the early retirement program at the global headquarters, costs of structural reforms, and other items. EBITDA rose 6% to ¥95.2 billion. Free cash flow improved by ¥101.8 billion to ¥66.5 billion on higher profitability and optimization of working capital and capital expenditures (2024 free cash flow was impacted by cash outflow associated with the acquisition of Dr. Dennis Gross Skincare).

Item (Billion yen)	2025	2024	YoY Change
Net Sales	970.0	990.6	−20.6 (−2%)
Core Operating Profit	44.5	36.4	+8.2 (+22%)
Non-recurring Items	−73.3	−28.8	−44.5
Operating Profit (Loss)	−28.8	7.6	−36.4
Profit (Loss) before Tax	−27.7	−1.3	−26.4
Profit (Loss) Attributable to Owners of Parent	−40.7	−10.8	−29.9
EBITDA	95.2	89.6	+5.7 (+6%)
Free Cash Flow	66.5	−35.3	+101.8

On a core basis (excluding non-recurring items), the COGS ratio improved 0.6 points to 23.3% of net sales on brand and product mix improvement and a lower allowance for excess inventory write-offs. Marketing investments were maintained at ¥284.0 billion (29.3% of net sales) as the company continued investing in key brands via selection and concentration, while personnel expenses fell ¥11.0 billion to ¥216.7 billion, lowered by structural reform benefits in Japan, China & Travel Retail, and the Americas.

Segment Results

Japan grew net sales 0.4% to ¥295.3 billion and core operating profit 50.6% to ¥39.0 billion (core operating profit margin of 13.1%, up 4.4 points), driven by key brands, higher gross margin from brand and SKU optimization, structural reforms, and higher productivity. China & Travel Retail sales fell 4.3% to ¥342.2 billion with core operating profit down 10.4% to ¥64.5 billion, though net sales exceeded the initial target and mainland China delivered year-on-year growth in both Q4 and the full year. The Americas posted net sales of ¥106.6 billion (−10.1%) and a core operating loss of ¥11.6 billion amid continued challenges at Drunk Elephant and Dr. Dennis Gross Skincare. Asia Pacific and EMEA both increased sales and profit, with EMEA core operating profit up 48.5% to ¥3.9 billion on continued strong growth in fragrances.

Segment (Billion yen)	Metric	2025	2024	YoY Change %
Japan	Net Sales	295.3	294.3	+0.4%
Japan	Core OP	39.0	25.9	+50.6%
China & Travel Retail	Net Sales	342.2	357.8	−4.3%
China & Travel Retail	Core OP	64.5	72.0	−10.4%
Asia Pacific	Net Sales	73.3	71.7	+2.3%
Asia Pacific	Core OP	5.1	4.9	+3.6%
Americas	Net Sales	106.6	118.5	−10.1%
Americas	Core OP	−11.6	−9.2	–
EMEA	Net Sales	141.1	132.7	+6.4%
EMEA	Core OP	3.9	2.7	+48.5%
Total	Net Sales	970.0	990.6	−2.1%
Total	Core Operating Profit	44.5	36.4	+22.4%

In 2025, the company implemented changes to segment reporting: results related to domestic sales by IPSA Co., Ltd. and sales of health & beauty foods by the healthcare business, previously included in “Other,” are now included in the Japan Business, and 2024 results have been restated to reflect the changes.

2026 Full-Year Forecast

For 2026, Shiseido forecasts net sales of ¥990.0 billion (+2% year on year; +3% like-for-like) and core operating profit of ¥69.0 billion (+55%), targeting a core operating profit margin of 7.0%. With non-recurring items expected to narrow to −¥10.0 billion (production/logistics and office optimization and other structural reforms), operating profit is projected at ¥59.0 billion and profit attributable to owners of parent at ¥42.0 billion. The company targets ROIC of 5% and ROE of 7%, with free cash flow of ¥50.0 billion. Assumed exchange rates for 2026 are USD/JPY 150, EUR/JPY 170, and CNY/JPY 20.5. The plan reflects the impact of Japan–China tensions only through Q1.

Item (Billion yen)	2026 Forecast	2025 (Actual)	YoY Change
Net Sales	990.0	970.0	+20.0 (+2%)
Core Operating Profit	69.0	44.5	+24.5 (+55%)
Non-recurring Items	−10.0	−73.3	+63.3
Operating Profit	59.0	−28.8	+87.8
Profit (Loss) before Tax	60.0	−27.7	+87.7
Profit (Loss) Attributable to Owners of Parent	42.0	−40.7	+82.7
EBITDA	119.0	95.2	+23.8 (+25%)
Free Cash Flow	50.0	66.5	−16.5 (−25%)
ROIC	5%	−2.0%	–
ROE	7%	−6.6%	–

By segment, the company assumes 2026 like-for-like net sales growth of +MSD% in Japan, −LSD% in China & Travel Retail, +HSD% in Asia Pacific, +HSD% in the Americas (driven by the Drunk Elephant turnaround and synergies with EMEA), and +HSD% in EMEA, for total growth of +3%.

Shareholder Returns

The dividend for 2025 was ¥40 per share (interim ¥20, year-end ¥20). For 2026, the company plans to increase the annual dividend to ¥60 per share (interim ¥30, year-end ¥30), aiming to enhance shareholder returns on the back of a reinforced profit model built through structural reforms and to ensure sustainable shareholder returns based on strong cash flow projections.

Item	2025	2026 (Plan)
Annual Dividend (yen/share)	40	60
Interim (yen)	20	30
Year-end (yen)	20	30

Structural Reforms and Medium-Term Targets

Shiseido realized ¥27.0 billion of cost reduction benefits in 2025, ahead of target, across COGS (¥4.0 billion), marketing investments (¥2.0 billion), personnel expenses (¥15.0 billion), and other SG&A (¥6.0 billion). For 2026, the company is on track to achieve benefits of ¥25.0 billion or more, with all actions completed in 2025. Over the medium term, the company aims to deliver a core operating profit margin of 10% or more by 2030 through growth and cost optimization, an asset-light approach (sale, lease termination, and relocation of real estate properties, and asset monetization), and embedding an ROIC management culture across the organization, including ROIC-based indicators in executive remuneration.

On brands, the company positions SHISEIDO, Clé de Peau Beauté, and NARS as Core brands and ELIXIR, ANESSA, narciso rodriguez, ISSEY MIYAKE PARFUMS, Zadig&Voltaire, Max Mara, and Dr. Dennis Gross Skincare as Next brands. Key brands delivered +4% like-for-like net sales growth in the second half of 2025, with market share gains in Japan local, China, and Asia Pacific. For Drunk Elephant, inventory normalization across key regions and retailers and cost structure reform actions in the Americas were completed within 2025, with brand repositioning underway. The company also plans a string of new product launches featuring 10 or more leading-edge technologies by 2028.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.