Japanese cosmetics giant Shiseido announced on Friday, May 12 a sharp rise in first-quarter profits but did not raise its full-year forecasts, against the backdrop of sales growth of only 2.6%.

Between January and March, the group saw its net profit almost double over one year to 8.7 billion yen (59 million euros), an improvement attributed to the upturn in its sales and to "agile cost management". Its operating profit jumped 140% to 10.5 billion yen (€71.2 million) in the same period.

Its sales for the quarter rose by only 2.6% year-on-year to 240 billion yen (1.6 billion euros), but Shiseido said in a statement that excluding the effects of exchange rates and transfers of activities, they had increased by 7.7%. Despite these "signs of improvement" in the first quarter, the cosmetics group recalls the "uncertainty that persists" due to the war in Ukraine and price increases.

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Shiseido therefore did not change its annual forecasts: net profit of 28 billion yen (190 million euros), which would be a drop of -18.1% over a year, and sales of 1,000 billion yen (6.8 billion euros), a decline of 6.3% compared to 2022.

The group's main headwinds for the first quarter came from China, its second-largest market after Japan, where its sales fell due to the rise in Covid-19 cases in January, and from its travel retail business due to "inventory adjustments" in shops.

"In contrast, we recorded sustained growth in Japan," Shiseido said in a statement, citing the launch of new products to capitalise on the recovery in its industry in the country.

Its sales also increased significantly in the Americas, EMEA and Asia-Pacific regions.