Shiseido reported Q1 26 net sales of €1.23bn (¥232bn), down 3% on a like-for-like basis versus the same period last year, yet core operating profit jumped 58% to €70m (¥13bn). The group is effectively trading near-term top-line for structural cost savings, and in Q1 at least, that trade is working.
When looking at geographies China and Travel Retail, which accounts for 34% of group sales, held up better than feared, declining only 1% on a like-for-like basis while core operating margin expanded 2.2 points to 19.8%, the group’s most profitable segment. The Americas swung from a -6.5% operating margin in Q1 2025 to +1.1% this quarter, driven by NARS, whose new Natural Matte Longwear Foundation launch at Sephora and Ulta contributed meaningfully to the 5% sales growth in the region. Japan, the largest single segment at 31% of sales, fell 4% as inbound tourism from China, historically a significant revenue driver, declined sharply, offsetting solid local demand from Elixir and the Shiseido brand itself.
EMEA was the weakest region, down 10%, partly explained by tough comparisons against last year’s new product launches for Zadig&Voltaire and Issey Miyake.
From a brand perspective, Anessa was the biggest underperformer globally, down 17%, due to a combination of campaign timing, price distortion and inventory problems in China linked to unauthorized channel inflows, a recurring structural challenge for suncare brands with high China exposure. NARS was the standout at +7% globally, while Elixir grew 4% on the back of hero product momentum in Japan and more than doubled its Asia Pacific sales through open-sell channel expansion.
The full-year forecast remains unchanged at €373m (¥69 bn) in core operating profit, though the Japan sales outlook has been revised down from mid-single-digit to low-single-digit growth while China and Travel Retail has been revised up. Whether the structural reform payoff continues to offset geopolitical and demand headwinds in the back half of 2026 is the central question for the rest of the year.