Shiseido profit sinks on falling Japan sales

AP News
Posted: Apr 27, 2011 4:07 AM
Shiseido profit sinks on falling Japan sales

Japan's top cosmetics maker Shiseido said Wednesday its quarterly profit plunged 62 percent due to tumbling domestic sales following last month's earthquake and tsunami.

Shiseido Co. Ltd. said its January-March net profit shrank to 3.8 billion yen ($46.5 million) from 10 billion yen a year earlier. Revenue edged up 2.3 percent year-on-year to 183.7 billion yen as strong foreign sales offset weakness in Japan.

Sales in Japan, which account for over half of Shiseido's total revenue, took a beating due to sluggish demand following the March 11 earthquake and tsunami. Shiseido said domestic sales fell 8.7 percent to 95.8 billion yen.

"Domestic demand was already weak before the March tsunami, and then the disaster really depressed consumer sentiment in Japan. Falling demand at home dragged down our net profit," said Shiseido spokeswoman Megumi Kinukawa.

But demand abroad was brisk during the quarter. Shiseido's foreign sales jumped 18 percent year-on-year to 87.9 billion yen. Sales in key regions _ Asia, Europe and North America _ all posted double-digit growth from the same quarter last year.

In the fiscal year ended March, Shiseido's net profit also dropped 62 percent _ to 12.8 billion yen with revenue up 4.1 percent to 670 billion yen.

In the current fiscal year ending March 2012, Shiseido forecasts its net profit will jump by 64.2 percent to 21 billion yen on revenue rising 1.4 percent to 680 billion yen.

Shares in Shiseido fell 3.9 percent to close at 1,360 yen on the Tokyo Stock Exchange Wednesday.