Shiseido Company (SSDOY) AI Stock Analysis

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Shiseido Company

(OTC:SSDOY)

Rating:57Neutral

Price Target:

$17.50

▲(7.16% Upside)

Shiseido's overall stock score is primarily influenced by its financial performance challenges, including negative profitability and increased leverage. While the earnings call highlighted successful cost management and structural reforms, declining net sales and regional underperformance remain significant concerns. Technical analysis suggests limited upward momentum, and the valuation is unattractive due to a negative P/E ratio.

Shiseido Company (SSDOY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.57B

Dividend Yield1.14%

Average Volume (3M)2.97K

Price to Earnings (P/E)527.8

Beta (1Y)0.27

Revenue Growth-3.83%

EPS Growth-109.28%

CountryUS

Employees27,908

SectorConsumer Defensive

Sector Strength45

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)0.10

Shares Outstanding400,000,000

10 Day Avg. Volume2,297

30 Day Avg. Volume2,972

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.38

Enterprise Value/Revenue<0.01

Enterprise Value/Gross Profit0.01

Enterprise Value/Ebitda0.13

Forecast

1Y Price Target

$17.50

Price Target Upside7.16% Upside

Rating ConsensusHold

Number of Analyst Covering0

Shiseido Company Business Overview & Revenue Model

Company DescriptionShiseido Company, Limited engages in the production and sale of cosmetics in Japan and internationally. The company offers fragrances; makeup products; skincare and body care products; and hair care and styling products, as well as hair color and perm solutions for hair salons. It also engages in the restaurant and food, and retail businesses; and operates beauty salons. In addition, the company operates and supports SABFA, a professional hair makeup training school. It sells its products through department stores, specialty stores, and drug stores. The company was founded in 1872 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyShiseido generates revenue primarily through the sale of its cosmetics and skincare products across various channels, including retail, e-commerce, and professional salons. Its revenue model is diversified into several key segments: skincare, makeup, fragrance, and hair care. The company also benefits from significant partnerships with retailers and distributors globally, enhancing its market reach. Additionally, Shiseido invests in research and development to innovate and improve its product offerings, which helps maintain brand loyalty and attract new customers. Seasonal promotions, collaborations with influencers, and limited edition launches also contribute to driving sales and boosting revenues.

Shiseido Company Earnings Call Summary

Earnings Call Date:Aug 06, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 10, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with significant achievements in cost management and structural reforms leading to improved profitability. However, these were countered by notable challenges such as declining net sales, underperformance in key markets like the Americas, and increased risks associated with Drunk Elephant. While the company is making strides in market share expansion and cost reductions, the sales decline and regional challenges present substantial hurdles.

Q2-2025 Updates

Positive Updates

Core Operating Profit Exceeds Expectations

For H1, core operating profit was JPY23.4 billion, an increase of JPY4.1 billion YoY, exceeding expectations and achieving over 60% of the full-year guidance of JPY36.5 billion.

Structural Reforms Yield Positive Results

The company implemented structural reforms and cost management strategies that resulted in improved profitability despite declining net sales, including a JPY13.2 billion increase in core operating profit in Japan.

Successful Cost Reductions

Realized JPY13.5 billion in cost reduction benefits in H1, with a full-year target increased to JPY25 billion, and a two-year target increased to JPY50 billion.

Market Share Expansion

The company expanded its market share in fragrances in Japan, Asia Pacific, and Europe, and achieved growth in China and Travel Retail in Q2 despite prior challenges.

Positive Free Cash Flow

Free cash flow turned positive at JPY17.5 billion, improving from a negative figure in Q1 due to higher profit before tax and other factors.

Negative Updates

Net Sales Decline

Net sales for H1 were JPY469.8 billion, with an underlying growth rate of minus 6%, primarily due to weakness in China Travel Retail and Drunk Elephant.

Challenges with Drunk Elephant

Drunk Elephant's performance fell far short of expectations, contributing to underperformance in the Americas, with risk of impairment losses increasing.

Americas Underperformance

The Americas market maintained YoY growth but fell short of expectations in Q2, with core operating profit dropping JPY3.3 billion due to sales decline.

Inbound Market Slowdown in Japan

The inbound market in Japan slowed down, with consumer purchases turning negative in Q2, impacting sales despite profitability improvements.

Sales Risks in H2

There are risks to achieving sales targets in H2, particularly in Japan and the Americas, with the potential for flat sales growth instead of the originally planned 4% growth.

Company Guidance

During Shiseido Company Limited's 2025 Q2 earnings call, the company provided comprehensive guidance across various metrics. The half-year results showed net sales amounting to JPY469.8 billion, with a decline of 6% due to challenges in China Travel Retail and Drunk Elephant brands. Despite this, core operating profit reached JPY23.4 billion, exceeding expectations by JPY4.1 billion YoY, and representing over 60% of the full-year guidance of JPY36.5 billion. The company emphasized its focus on structural reforms and financial discipline, achieving a 1.5 percentage point improvement in the cost of goods sold ratio. Marketing investments decreased by JPY2.7 billion, while personnel expenses saw a JPY15 billion reduction. Shiseido also maintained high profitability in challenging regions like Travel Retail, achieving a core operating profit margin of 22.1%. For the full year, the company remains committed to reaching a core operating profit of JPY36.5 billion, despite risks to net sales, by accelerating reforms and cost management. Free cash flow turned positive at JPY17.5 billion, and the company plans to further its global cost structure transformation, aiming for a JPY25 billion reduction in 2025. The guidance also noted potential impairment risks in the Americas, with specific challenges highlighted for the Drunk Elephant brand.

Shiseido Company Financial Statement Overview

Summary

Shiseido Company demonstrates strong gross profit margins but struggles with profitability due to a negative net income and declining EBIT and EBITDA margins. The balance sheet shows increased leverage, posing financial risk, although the equity ratio remains healthy. Cash flow analysis indicates issues in generating free cash flow despite strong operating cash flow.

Income Statement

Positive

The gross profit margin is strong at approximately 76% for 2024, indicating efficient cost management. However, net profit margin is negative, signaling challenges in profitability. The revenue growth rate from 2023 to 2024 is modest at 1.8%, which shows limited top-line growth. EBIT and EBITDA margins have declined compared to the previous year, pointing to increased operational costs or reduced operating efficiency.

Balance Sheet

Neutral

The debt-to-equity ratio has increased to 0.57 in 2024, reflecting rising leverage which could pose higher financial risk. Return on Equity (ROE) is negative, indicating that the company is not generating profits from its equity base. However, the equity ratio stands at around 47.5%, suggesting a balanced asset structure despite the leverage concerns.

Cash Flow

Neutral

The free cash flow has turned negative in 2024, raising concerns about cash generation capability. Operating cash flow to net income ratio is favorable, indicating strong cash generation relative to accounting profits. However, the free cash flow to net income ratio is negative, highlighting challenges in converting profits to free cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	990.59B	973.04B	1.07T	1.04T	920.89B
Gross Profit	753.19B	713.36B	744.16B	772.21B	682.49B
EBITDA	80.80B	92.23B	129.77B	130.61B	80.64B
Net Income	-10.81B	21.75B	34.20B	46.91B	-9.12B
Balance Sheet
Total Assets	1.33T	1.26T	1.31T	1.18T	1.20T
Cash, Cash Equivalents and Short-Term Investments	126.86B	126.64B	137.53B	172.06B	151.01B
Total Debt	363.16B	280.98B	297.19B	190.98B	324.30B
Total Liabilities	677.21B	615.11B	681.91B	611.93B	697.64B
Stockholders Equity	632.47B	618.75B	604.26B	546.09B	485.69B
Cash Flow
Free Cash Flow	-2.31B	33.35B	-19.47B	30.43B	-9.44B
Operating Cash Flow	48.40B	89.03B	46.73B	122.89B	64.05B
Investing Cash Flow	-83.74B	-35.54B	-41.31B	63.74B	-70.08B
Financing Cash Flow	23.36B	-75.64B	-52.42B	-176.22B	46.88B

Shiseido Company Technical Analysis

Technical Analysis Sentiment

Negative

Last Price16.33

Price Trends

50DMA

17.01

Negative

100DMA

16.72

Negative

200DMA

17.28

Negative

Market Momentum

MACD

-0.04

Positive

RSI

42.13

Neutral

STOCH

0.22

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSDOY, the sentiment is Negative. The current price of 16.33 is below the 20-day moving average (MA) of 16.97, below the 50-day MA of 17.01, and below the 200-day MA of 17.28, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 42.13 is Neutral, neither overbought nor oversold. The STOCH value of 0.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SSDOY.

Shiseido Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELF	77 Outperform	$6.53B	68.24	12.97%	―	18.61%	-21.36%
IPAR	65 Neutral	$3.66B	23.00	20.68%	2.72%	7.04%	13.52%
Sector *	63 Neutral	$20.46B	14.47	-3.60%	3.13%	2.63%	-6.18%
SSDOY	57 Neutral	$6.57B	527.80	-0.15%	1.14%	-3.83%	-109.28%
EL	50 Neutral	$32.33B	147.29	-24.69%	1.85%	-8.14%	-389.12%
HELE	49 Neutral	$558.50M	5.74	-23.99%	―	-4.39%	-326.42%
COTY	46 Neutral	$3.22B	40.12	-9.98%	―	-3.68%	-631.67%

* Consumer Defensive Sector Average

Performance Comparison

SSDOY

Shiseido Company

16.33

-6.07

-27.10%

The Estée Lauder Companies

92.61

2.29

2.54%

HELE

Helen Of Troy

25.06

-28.32

-53.05%

IPAR

Inter Parfums

116.02

-9.75

-7.75%

COTY

Coty

4.20

-5.18

-55.22%

ELF

e.l.f. Beauty

124.90

-24.89

-16.62%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025