By Jason Chau

Shiseido's stock jumped by the most in over 17 years after the Japanese cosmetics giant reported better-than-expected results and guided for strong earnings this year.

The stock surged more than 16% Thursday, on track for it best largest single-day gain since Oct. 2008, LSEG data show.

That came after Shiseido on Tuesday said that core operating profit rose 22% for the year ended December 2025, significantly beating its guidance. The Tokyo-based projects that core operating profit will climb 55% for the current fiscal year.

Japan's stock market was closed Wednesday for a public holiday.

Shiseido has been cutting costs and refocusing on core products, in particular its fragrance lineup, to drive growth.

The renewed focus on key brands seems to be gaining traction, said Morningstar director Lorraine Tan, expressing confidence in premium products' ability to drive profitability.

"We would not be surprised to see continued portfolio optimization and divestment of non-core brands," Tan said in a note.

However, Shiseido's sales continue to face pressure in some areas.

A sharp decline in Chinese tourists traveling to Japan weighed on cosmetics sales, which grew less than expected for the full year, the company said.

"Given the domestic market's higher margins, the impact of any slowdown [there] on earnings could be magnified," Morningstar's Tan said.

Sales in China, a key market, have been hurt by lower consumer spending, though signs of recovery are emerging, the company said.

Shiseido is currently forecasting overall net sales growth of just over 2% for the year.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

February 11, 2026 23:31 ET (04:31 GMT)

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