Shiseido Co Ltd Ord (SSDOF) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you very much. So this is Fujiwara, the CEO and the president of the company. Now, first, let me introduce the key points of Q1 2026 financial results. Day three. In the first quarter, while challenges remain in terms of sales, profit growth exceeded expectations. Core operating profit was 13 billion yen, an increase of 4.8 billion yen year over year. We believe this is a result of the structural reforms implemented over the past few years, functioning effectively even during periods of declining revenue, improvements in fixed cost structure and discipline. The investment decisions have strengthened our so-called management strength or resilience to environmental changes. On the other hand, net sales were 232 billion yen, representing a real growth rate of minus 3%. This year's biggest theme is shifting to a new growth trajectory, and we take this figure very seriously. However, we have clearly identified that factors contributing to the declines in sales by brand and region, and we have already taken some actions, and I would like to cover that later. Previously, optimism about the sales growth and delays in responding to market changes sometimes led to the cost adjustment being delayed. Currently, we are shifting to a system that allows us to grasp the business situation in a timely manner and control it effectively based on priorities. This profit increase is not the result of a short-term reduction in marketing. We believe the essence of this increase lies in our organizational ability to distinguish between necessary investment and costs to be curbed while maintaining investment in marketing and R&D as our focus area. The business environment remains fluid and geopolitical risks are rising. Still, the overall impact of Japan-China tensions is manageable. W...