Shiseido's first quarter of 2026 trading started weakly, with group sales falling 3% to ¥232 billion compared to the same period last year. The Japanese beauty conglomerate, owner of skincare brand Drunk Elephant and makeup brand NARS, attributed the decline to ongoing tensions between Japan and China, triggered in November 2025 by comments from Japanese Prime Minister Sanae Takaichi regarding a potential Chinese invasion of Taiwan. The impact was "within expectations" but led to a 1% drop in Shiseido's China & Travel Retail segment. Overall net sales also fell due to timing shifts in some brands and inventory adjustments, though profits rose 58% to ¥13 billion.
In the US, net sales reached ¥29.6 billion, a 5.1% increase compared to Q1 2025, supported by strong consumer purchase rates. Shiseido's own brand reported strong sales of Vital Perfection, while NARS returned to positive growth in the region. Drunk Elephant showed signs of recovery, with sales down 14% year-on-year, a narrower decline than previous quarters, following a new campaign and brand direction in January 2026 aimed at distancing itself from the 2024 'Sephora Kids' controversy. Shiseido plans to turn around Drunk Elephant through brand ambassadors, partnerships, and a creator community to drive engagement, alongside launching "unrivalled" hero products.
Shiseido also updated on the Middle East conflict, monitoring raw material and logistics cost pressures and supply chain risks, including production delays. Its full-year 2026 outlook anticipates declining sales in the Middle East and rising costs. Additionally, Shiseido announced plans to close the Hsinchu Factory of its consolidated subsidiary, Taiwan Shiseido, transferring production to its domestic base in Japan to "enhance global capacity utilisation and improve cost efficiency," part of its 2030 Medium-Term Strategy announced in November 2025.
Source: Read the original report | Published: May 13, 2026