Sales in China of cosmetic products under major Shiseido Co. brands fell 55 percent during the Lunar New Year holiday from a year earlier due to the outbreak of a new coronavirus originating in Wuhan, central China, the Japanese company said Thursday.
The spread of the deadly pneumonia-causing virus also pushed sales to foreign tourists in Japan down 40 percent in the Jan. 24-30 period, Shiseido President Masahiko Uotani said at a press conference.
Shiseido, a popular brand among Chinese consumers and whose sales in China account for 20 percent of the total, will scale down sales promotion activities in China until April, Uotani said.
In announcing its earnings reports for the year through December, Shiseido projects a group net profit of 77.5 billion yen ($705 million), up 5.4 percent from the previous year, and a pretax profit of 117 billion yen, up 7.6 percent, on sales of 1.22 trillion yen, up 7.8 percent.
But Uotani said the earnings forecast does not take the impact of the coronavirus outbreak on its business into account.
"We haven't projected the effect on earnings as we don't know how big a blow the virus will deal to our businesses," he said. "We hope to give a clear projection when we report midterm earnings."
Shiseido will craft a midterm earnings report on the assumption that the spread of the virus would come to an end in the second half of 2020.