Japan's Shiseido becomes latest luxury brand hit by China slump, shares plunge
08/08/2024 04:30
TOKYO, Aug 8 (Reuters) - Japanese cosmetics powerhouse
Shiseido 4911.T fell by its daily limit in Tokyo trading on
Thursday following midyear earnings that were hit by
restructuring costs and slumping demand in China.
Shiseido becomes the latest casualty among luxury brands,
including Cartier-owner Richemont CFR.S and Gucci's Kering
PRTP.PA , to be stung by slowing growth and consumer confidence
in the world's second-biggest economy.
The company said on Wednesday it fell to an operating loss
of 2.7 billion yen ($18.44 million) in the six months through
June, from profit of 13.6 billion the previous year.
The shares plunged by their daily limit of 700 yen, down
15.5% from the previous session close.
In addition to a slump in sales to China due to changes in
purchasing behaviour, the recording of 20.4 billion yen in
structural reform costs also affected results.
Domestic sales were a bright spot, however, benefiting from
a tourism boom in Japan fuelled by the weak yen. Some tourists,
particularly Chinese, appear to be holding off on buying
designer goods at home and splurging in Japan where they are
cheaper.
($1 = 146.4100 yen)
(Reporting by Rocky Swift; Editing by Christopher Cushing)
((rocky.swift@thomsonreuters.com;))