Shiseido Co. shares fell to their lowest in eight years after investors were underwhelmed by the companyâs plan to counteract a slump in China by boosting growth elsewhere.
Shares fell as much as 8.4 percent â its lowest since November 2016 â in early trading Monday. The stock was trading 7.7 percent down at Â¥2,635.5 a piece as of 12:31 p.m. in Tokyo.
The Japanese cosmetics maker Friday set its operating profit margin target at 7 percent in 2026, lower than the 9 percent originally envisioned for 2025. While the newest forecast is still double what its likely to achieve this year, Shiseido is trying to drive growth in Japan and other major markets to compensate for its slump in China.
The market didnât appear convinced by the plan.
The business strategy briefing was negative, Hisae Kawamoto, an analyst at Jefferies, wrote in a note. There could be âinvestor fatigueâ with the companyâs structural reforms and itâs hard to say if this measure will help, according to the note.
China is the cosmeticâs companyâs most crucial market outside Japan. The company has seen demand for its once-popular cosmetics crater in China, amid tensions between Tokyo and Beijing over Japanâs decision to discharge treated water from the wrecked Fukushima nuclear power plant.
âThe market will remain unstable for the foreseeable future,â Chief Executive Officer Kentaro Fujiwara told reporters Friday.
This year, the company offered an early retirement plan to as many as 1,500 employees in Japan, as part of a two-year cost-cutting program meant to save more than ¥40 billion, as well as a different scheme to secure an additional ¥25 billion in savings in 2026.
By Nicholas Takahashi
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Shiseido Lowers Full-Year Forecast As China Slump Persists
Shiseido reported on Thursday a 26 percent decline in core operating profit over the first nine months of this year.
