TOKYO—Shiseido reported net profits declined 38.2 percent to 29.05 billion yen, or $198.4 million, for the nine months ended Sept. 30. The drop was mainly as a result of impairment losses related to the transfer of the corporate’s personal care business, posted within the period under review, while the gains on the identical transfer were posted in the identical period a yr prior.

Operating profit at Japan’s largest cosmetics company ell by 62.7 percent to 35.66 billion yen.

Shiseido saw nine-month net sales grow 4.7 percent to 762.74 billion yen.

In 2021 Shiseido launched a latest strategy, under which it should implement global reforms with an emphasis on profitability and money flow by specializing in what it calls “skin beauty.” Recognizing that that is where its strength lies, it’s restructuring its business portfolio and improving profitability. The present yr is what the corporate is asking its “back to growth” yr, and it’s specializing in promoting the expansion of its global brands. 

“While net sales on a like-for-like basis were lower than last yr within the China business, which continues to be impacted by lockdowns, we achieved strong growth within the travel retail, Asia-Pacific, EMEA, and Americas businesses. Our key skin beauty brand Clé de Peau Beauté and core makeup brand Nars grew strongly and drove the expansion. Within the Japan business, the expansion turned to positive due to the renewal of Elixir in September and other aspects,” the corporate said in a release.

Sales in Japan rose by 1.3 percent to 178.56 billion yen, while sales in China declined by 10.7 percent to 171.9 billion yen. Shiseido saw its sales within the Asia-Pacific region grow 10.2 percent to 48.74 billion yen, and within the Americas sales by 7.7 percent to 97.91 billion yen. Sales within the Europe, Middle East and Africa region gained 10 percent to 89.7 billion yen. The corporate’s travel retail business gained 15.2 percent to 120.14 billion yen. 

Individually on Thursday, Shiseido’s representative director, president and chief executive officer Masahiko Uotani announced that he’s putting into place a succession plan for his eventual retirement. As of Jan. 1, 2023, his role will change to representative director, chairman and chief executive officer, while Kentaro Fujiwara will assume the position of president and chief operating officer. Fujiwara can be expected to be chosen as representative director at a board meeting in March of next yr.

“Fujiwara and I’ll work closely together for 2 years managing the corporate jointly, after which we are going to see what happens after that. I don’t want to only pass the baton on suddenly,” Uotani said. 

The corporate left unchanged its guidance for the 12 months ending Dec. 31. It expects net profit to drop by 45.6 percent year-on-year to 25.5 billion yen.

Operating profit for the yr is anticipated to say no by 6 percent on the yr, coming in at 40 billion yen.

Shiseido is forecasting yearly net sales of 1.07 trillion yen, representing growth of 5.9 percent over the previous yr.