SHISEIDO shares fell to their lowest in eight years after investors were underwhelmed by the company’s plan to counteract a slump in China by boosting growth elsewhere.
Shares fell as much as 8.4 per cent – its lowest since November 2016 – in early trading on Monday (Dec 2). The stock was trading 7.7 per cent down at 2,635.5 yen a piece as at 12.31 pm in Tokyo.
The Japanese cosmetics maker on Friday set its operating profit margin target at 7 per cent in 2026, lower than the 9 per cent originally envisioned for 2025. While the newest forecast is still double what its likely to achieve this year, Shiseido is trying to drive growth in Japan and other major markets to compensate for its slump in China.
The market did not appear convinced by the plan.
The business strategy briefing was negative, Hisae Kawamoto, an analyst at Jefferies, wrote in a note. There could be “investor fatigue” with the company’s structural reforms and it’s hard to say if this measure will help, according to the note.
China is the cosmetic company’s most crucial market outside Japan. The company has seen demand for its once-popular cosmetics crater in China, amid tensions between Tokyo and Beijing over Japan’s decision to discharge treated water from the wrecked Fukushima nuclear power plant.
“The market will remain unstable for the foreseeable future,” chief executive officer Kentaro Fujiwara told reporters on Friday.
This year, the company offered an early retirement plan to as many as 1,500 employees in Japan, as part of a two-year cost-cutting programme meant to save more than 40 billion yen, as well as a different scheme to secure an additional 25 billion yen in savings in 2026. BLOOMBERG
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