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On Tuesday, Bernstein analysts maintained their Underperform rating on Shiseido Co Ltd (4911:JP) (OTC:SSDOY) with a steady price target of JPY1,700.00. The firm’s stance came after Shiseido reported its first-quarter financial results for 2025, which showed a notable decline in performance. Revenue fell by 8.5% year-over-year, while core operating profit dropped by 27%.
The quarterly results highlighted challenges across all regions for Shiseido, with like-for-like (LFL) sales contracting globally. Despite cost restructuring efforts that yielded some growth in Japan’s core operating profit margin (OPM), the Americas, EMEA, and Asia Pacific regions all reported negative core OPMs.
Bernstein’s analysis pointed to Shiseido’s ongoing difficulties in international markets, emphasizing structural challenges that seem to be intensifying. The analysts expressed skepticism regarding the company’s ability to meet its ambitious profit doubling target by 2026. They noted that while Shiseido’s most profitable segment, China & Travel Retail, continues to face persistent headwinds, there are no clear catalysts for recovery in sight.
Additionally, the skincare brand Drunk Elephant, acquired by Shiseido, has been underperforming, and Bernstein analysts remain unconvinced by the turnaround plans presented, which they described as vague. They advised investors to consider taking profits during any tariff relief rallies that might temporarily lift the stock price, cautioning that the fundamental issues within the company are likely to persist.
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