(Bloomberg) -- Shiseido Co. lowered its full-year net income forecast 13 percent, missing analysts estimates, as a stronger yen and the costs of its recent acquisitions dragged on profit.
Net income will probably be 30 billion yen this year, compared with a previous target of 34.5 billion yen, the company said Tuesday in a statement. That's also lower than the 36.2 billion yen average of analyst estimates.
The more than 140-year-old cosmetics maker faces rising costs for acquisitions after saying in June that it will buy U.S.-based Gurwitch Products LLC from closely held Alticor Inc., adding the Laura Mercier and ReVive brands to seek growth overseas. At home, where many retailers are facing stagnant consumption, Shiseido's skin-care and make-up products are increasingly being marketed to tourists, especially those from China.
“Shiseido's management may be concerned about how long demand from the inbound tourists will last,” Masashi Mori, an analyst at Credit Suisse Group AG in Tokyo said before the announcement. “They may also be cautious about the strong yen."
The cosmetics maker also cut its sales forecast to 848 billion yen, less than the 864.5 billion yen average of analyst estimates.
The company's shares gained 1.3 percent to 2,780 yen, bringing their gain this year to 9.9 percent, as of the close Tuesday in Tokyo. The benchmark Topix increased 0.9 percent.
To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net. To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Dave McCombs
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