SSDOY - Shiseido: Business Restructuring Plan In The Spotlight

2024-03-18 08:26:03 ET

Summary

• Cost cutting is a low-hanging fruit when it comes to profitability improvement, so I have a favorable view of Shiseido's JPY40 billion cost reduction goal.
• But it is likely to be tough for SSDOY to be popular with Chinese consumers again quickly with its brand optimization initiatives, considering competition from domestic players and the brand's challenges in attracting younger consumers.
• My rating for Shiseido is a Hold, as my opinion of the company's business transformation plan is mixed.

Elevator Pitch

I rate Shiseido Company, Limited ( SSDOY ) [4911:JP] as a Hold, as I have a mixed view of the company's new business restructuring plan. On one hand, I think that Shiseido can improve its profit margins by cutting costs aggressively. On the other hand, my opinion is that a swift sales recovery for the company is difficult, as more time is needed for SSDOY to optimize its branding to be more competitive....

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