Shiseido’s Q1 2025 results reflect a challenging global environment, with notable sales declines in China, travel retail, and the Americas, partially offset by strong profitability improvements in Japan and solid brand performance in select segments. Total sales reached ¥228.2 million yen ($1.5 billion). The company says structural reforms and cost management are yielding results, and it remains committed to its full-year targets while actively managing risks from tariffs and market volatility.

Shiseido‘s first-quarter earnings revealed an 8.5% percent drop in net sales, amid a slowdown across markets, with a particularly sharp drop in US sales. Drunk Elephant was one of the buzziest brands in beauty when Shiseido acquired it in 2019 for $845 million. Now it's a drag on the portfolio as sales slide 64%.

Ron Gee, Chief Executive of Shiseido’s US business and head of its M&A activity, stepped down abruptly in mid-April. EMEA President and Chief Executive Alberto Noe will continue to lead the region while also serving as interim US Chief Executive to drive a turnaround, particularly for Drunk Elephant.

Regional and Brand Highlights

Japan

• Consumer Purchases: Maintained strong momentum, growing at a high single-digit rate, driven by core brands and inbound tourism. However, reported sales declined 2.2% YoY due to temporary inventory adjustments by retailers.
• Profitability: Significant improvement, with core operating profit more than doubling YoY (+108.1%), reflecting benefits from structural reforms, reduced personnel expenses, and enhanced marketing efficiency.
• E-commerce: Saw high-teen percentage growth.

China & Travel Retail

• Sales: Declined sharply (−13.6% YoY), in line with expectations amid continued sluggish consumer spending and a downturn in travel retail, especially from Chinese tourists.
• Profitability: Despite the sales drop, profitability was maintained through fixed cost reductions and agile cost management. E-commerce in China grew at a low single-digit rate, while offline sales were hit harder.
• Brand Performance: Clé de Peau Beauté and Nars performed well, but Shiseido brand sales declined due to weak offline channels.

Americas

• Sales: Fell 19.4% YoY, with Drunk Elephant continuing to struggle. Dr. Dennis Gross Skincare showed robust growth, especially in e-commerce.
• Profitability: Dropped due to lower sales and increased marketing expenses. New leadership and turnaround strategies are being implemented.

EMEA (Europe, Middle East, Africa)

• Sales: Down 8.7% YoY, mainly due to a high base in Q1 2024 from advanced shipments. Fragrance consumer purchases remained solid, but overall profit declined due to higher marketing investments and lower sales.

Asia Pacific

• Sales: Flat YoY, with share expansion driven by higher marketing investment in core brands. Profit declined slightly due to increased personnel costs and lower sales in markets like Taiwan.