Shiseido Co. said it expects to return to operating profit this year after posting its first loss in decades in 2025 due to a writedown of the Drunk Elephant brand.
The cosmetics and beauty company forecasts operating profit of ¥59 billion ($380 million) for the year ending December, with sales seen rising 2.1 percent to ¥990 billion ($6,363 billion). Analysts on average project ¥56.4 billion ($362 million) in operating profit on sales of ¥992 billion ($6,377 billion).
Once a formidable challenger to L’Oreal SA and Estée Lauder Companies Inc., Japan’s largest cosmetics maker is navigating its toughest test in decades, hit by missteps in North America and losing market share to agile Asian rivals.
The company is cutting costs, prioritising core brands, expanding fragrances portfolio, and moving into medical and dermal cosmetics to put itself back on track. Chief Executive Officer Kentaro Fujiwara unveiled a plan in November to grow sales by 2 percent to 5 percent annually through 2030, targeting a core operating profit margin of at least 10 percent.
For the 12 months ended December 2025, Shiseido reported an operating loss of ¥28.8 billion ($165 million) after writing down more than half the value of its $845 million investment in Drunk Elephant brand amid declining sales and profit.
By Kanoko Matsuyama
Shiseido Faces Tough Turnaround After Costly Cosmetics Stumbles
Once a formidable challenger to L’Oréal and the Estée Lauder Companies, Japan’s largest beauty conglomerate is navigating its biggest challenge in decades, hurt by a costly misfire in North America and pressure from international rivals.
