Shiseido Co Ltd on Tuesday lowered its full-year outlook and said consumer sentiment had remained more cautious than the Japanese cosmetics maker expected, as the global pandemic continued to weigh on sales.
“The downturn in Japanese consumer sentiment has been greater than we expected. In western markets, the increasing trend in coronavirus cases has meant more restrictions of movement,” it said in a statement.
Like other companies in the luxury sector, Shiseido was hit hard by coronavirus lockdowns earlier this year as department stores and airport retailers shut down. A halt in tourism has been particularly painful as the company depended heavily on Chinese visitors.
The company said it expects a net loss of 30 billion yen ($285.69 million) for the full calendar year, worse than its previous loss forecast for 22 billion yen.
Shiseido said it was aiming to cut costs to minimise operating losses, but needed to spend money on clearing inventory in Japan and restructuring its U.S. business.
Sales in Japan, its key market with a 35 per cent share of its business, fell 32 per cent year-on-year in the nine months ended September.
But in China, its second-biggest market, the decline was far more moderate at 2 per cent and the company said it was seeing a recovery there.
“In China, most retailers have resumed operations, and we are seeing a quick recovery trend in all our segments, and sales, particularly in our high-end brands, are exceeding year-ago levels,” it said.