Shiseido sales up on higher international sales
The company reported that sales for the quarter grew by 7.9 percent to reach ¥157.3bn ($2.05bn), compared to first quarter revenues of ¥145.8bn in 2010, when sales revenues grew by 4.4 percent.
In the company’s mainstay domestic market the performance remained relatively sluggish, with sales growing by 2.6 percent to reach ¥89.6bn.
Domestic market picks up after earthquake
The company said that the domestic performance was impacted by the continuation of a sluggish consumer market following the The Great East Japan Earthquake disaster back in March, but also stressed that distribution had now returned to normal.
However, helped by the acquisition of Bare Escuentals and a continued rally in new markets, sales for its international division grew by 16 percent to reach ¥67.7bn, of which ¥22.3bn was accounted for by US sales, representing more than 40 percent of revenues for the division.
As well as gains in the US, the company stressed the fact that a strong performance in China had helped to push sales for its Asia Pacific operations, while the European market continued to show signs of an ongoing recovery.
Net losses cut back
The company also managed to cut back its net losses during the period, reporting a loss of ¥277m, compared to ¥666m in the corresponding period last year.
The company cited a deferred tax adjustment as being the primary cause of the losses, while increased international revenues helped to counterbalance this effect.
Looking ahead to the sales for the second quarter, the company said that it had upwardly revised its expectations by a further $2bn, due mainly to the depreciation of the Yen against international currencies.
Net income forecast revised downward
However, it also said that it was revising its net income forecast for the period downward by $3bn because of a difference in tax expense estimate when compared to the initial projections made earlier on in the year.
Shiseido is currently present in 83 countries and regions, and has recently commenced sales of the Shiseido brand in the Republic of Panama through the Columbian distributor Wisa Group.
In other new markets where it has expanded into in recent years, such as Georgia and Mongolia, the company has chosen to establish a selective retail strategy, choosing to marketed its branded lines in outlets where a high level of service and product knowledge are assured.
Despite growth slowing more than expected as a result of the global financial crisis, Shiseido hopes to achieve net sales of over ¥1 trillion by the end of 2017, with 50 per cent of this expected to come from overseas markets, the spokesperson said.