Here, I would like to explain the Q3 performance for 2024. First, please take a look at the summary on page 3. After the summer, travel retail in China faced further challenges. The Q3 was a quarter focused on achieving profit by thoroughly improving efficiency and scrutinizing costs. The good news is Japan. The results of the reforms implemented so far are clearly reflected in the significant increase in profits, which has become a key driver supporting the overall company's profitability. Consolidated net sales on a like-for-like basis, excluding the impact of foreign exchange in all business transfers, declined by 8% in the three months from July to September, and by 3% on a cumulative basis for the Q3. In Japan, the core brands continued to perform well, with the launch of new products in the Q3 driving strong growth.
Despite a slowdown in inbound sales, the overall business in Japan continued to show double-digit growth on a cumulative basis. In EMEA, sales declined in the Q3 due to shipping delays and other timing issues, but on a cumulative basis, sales showed an increase. On the other hand, in travel retail in China, the decline in Chinese consumer demand, which became evident in the first half of the year, accelerated further in the Q3, resulting in a greater-than-expected decrease in sales. In the Americas, net sales continued to decline in the Q3. The production shortfall caused by IT system implementation issues in the Q2, which had led to a significant sales decline, has been largely resolved. However, there has been a delay in recovering from the loss of consumer purchases due to the supply reduction earlier in the year.
Core operating profit for the Q3 on a cumulative basis was 27.4 billion JPY, a decrease of 9.4 billion JPY compared to last year. The significant impact of declining sales in the high-margin travel retail segment was a major factor. However, the Japan business has steadily improved in terms of profitability and productivity, realizing a significant increase in profit. In the light of the performance being more challenging than expected in travel retail, China, and the Americas, as well as a more difficult outlook for the Q4 than what was expected in August, we are revising our full-year forecast for the core operating profit from 55 billion JPY to 35 billion JPY. The year-end dividend forecast will remain unchanged at this time. However, we will closely monitor the situation and review as needed. Next, on page 4, here is the executive summary of the P&L.
On the left, we show the figures for the three months from July to September, and on the right, the year-to-date for the nine months. First Q3 year-to-date, the actual net sales and core operating profit are explained, as earlier. Operating profit is 2.2 billion JPY, a decrease of 23.6 billion JPY versus last year. In addition to the decline in core operating profit, the 25.2 billion JPY of non-recurring items had a significant impact. In the first half of the year, we incurred structural reform costs related to Japan's early retirement program and organizational optimization and store closures in China. On top of that, we had 3.2 billion JPY in costs in Q3, primarily related to the termination of leases for directly operated stores and offices. For non-recurring expenses, we had originally forecasted 30 billion JPY for the full year, and there has been no significant difference from that estimate.
The quarterly profit attributable to the owners of the parent company was JPY 800 million, a decrease of JPY 19.8 billion compared to the previous year. Next, core operating profit for the period from July to September was JPY 8.1 billion, with a profit margin of 3.8%. Despite a decrease in actual sales of 8% year-on-year, we maintained the same level of profit margin as in the first half of the year. This result reflects the efforts across the company of prioritization of investments and thoroughly managing costs. While the profit margin is not at a level we are fully satisfied with, we will continue working toward establishing a high profitability structure going forward. Next is page 5, the net sales by brand.
ELIXIR accelerated its growth significantly from a 5% increase in the first half to an 18% increase in the Q3, resulting in a 9% growth for the nine months. The launch of the Youth Accelerator Serum, the serum, in Japan in September had a strong start, with cumulative shipments reaching 520,000 units just 10 days after its release, far surpassing expectations and driving overall brand growth. The fragrance segment also maintained strong performance, particularly in EMEA and the Americas. On the other hand, other key brands saw a decline due to the impact of reduced sales in travel retail, China, and the Americas. Brand Shiseido experienced a 7% decrease globally, primarily due to the declined sales in travel retail in China.
Peau Beauté continued to grow in Japan and China, supported by a strong base of loyal users, but was significantly impacted by the drop in consumption in Travel Retail, resulting in a 2% decline globally. Drunk Elephant faced a substantial drop in shipments in the Americas and also saw negative growth in EMEA in Q3, turning negative globally. We recognize that revitalizing Brand Shiseido in China and recovering consumer purchases of Drunk Elephant in the Americas are our urgent priorities, and we are committed to making every effort to address these challenges and drive recovery. Next, on page 6, we have the year-on-year net sales by region. On a cumulative basis, Japan, EMEA, and Asia-Pacific saw an increase in sales, while China, Travel Retail, and the Americas experienced a decline. In Japan, shipments increased by 5% in the Q3, showing a slight slowdown compared to previous growth rates.
However, consumer purchases have remained strong. Since May of last year, following the full post-COVID reopening, we have maintained growth momentum despite higher year-on-year comps. This is a reassuring sign that our strategy of selection and concentration, along with innovations driven by our technical capabilities, is working effectively. Next, EMEA, which had maintained strong growth through the first half of the year, saw a temporary decline in the Q3 due to the impact of delayed shipments of holiday products and the high year-on-year comps from last year's initial shipments of new products. In China and travel retail, Chinese consumer spending declined even further compared to the first half of the year, resulting in a larger-than-expected negative growth. For the Americas, we had originally expected a recovery in the second half of the year.
However, after the decline in the Q2, sales also fell short of expectations in the Q3, resulting in a significant drop in revenue. Next is page 7 about Japan. In the Q3, local market continued to maintain growth. Despite higher year-on-year comps, the positive trend from the first half of the year was sustained. As for inbound sales, while the number of inbound tourists to Japan continues to rise, there has been a declining trend in cosmetic purchases, and the pace of growth has slowed down. Amidst this, our Japan business continued to lead overall growth with strong performance, achieving a robust growth rate in the low teens percentage for core brands. The increase in market share in the mid-to-high price segment contributed to this expansion, and overall, we saw an increase in market share.
Both Shiseido, Clé de Peau Beauté, and Elixir have steadily been growing their user base, and all three brands have expanded their share in local market. Following the success of Shiseido's Foundation Serum, Elixir's Youth Accelerator Serum has also gained significant market share in the serum category, recording a major hit. E-commerce sales have also continued to show steady growth, expanding at a pace of high 20%, outperforming the overall business as we continue to expand the range of brands available online. As for inbound sales, the Q3 results were below expectations. However, we will cover this shortfall with increased sales from the strong performance of our local business. Next is page 8, China and travel retail. First, regarding the Chinese market, consumer spending continues to decline due to increased saving tendencies and a more cautious approach to spending, driven by uncertainties about the economic outlook.
This situation has become even more challenging compared to the first half of the year. Our business in China continued to experience negative growth. By channel, e-commerce showed a solid performance, with a growth rate in the low 20% range in the Q3, benefiting from the relatively low comps last year following the release of treated water from Fukushima, which led to reduced purchases of Japanese products. However, offline sales saw a significant decline. From a brand perspective, Brand Shiseido, in particular, despite last year's significant decline, experienced further decline in sales. To rebuild the brand value, we will accelerate our efforts for Selection and Concentration investment strategy on key products. Next, regarding Travel Retail, the decline in spending by Chinese travelers has been more significant than expected, and the situation has become increasingly challenging.
While we have already implemented inventory adjustments, we will continue to rigorously manage inventory levels and to ensure control so that we do not have excessive shipments. We will also maintain our strategy of focusing on traveler-centric business and intentionally reducing non-tourist sales. While the current situation remains difficult with prolonged profit declines across the company, we are committed to improving the health of the business and ensuring stable mid-to-long-term growth. Despite the challenges, travel retail in Japan has continued to grow, driven by a recovery in the number of store visitors. In EMEA and the Americas, high growth rates have continued, particularly in the fragrance segment.
Next, page 9, we will look at the Americas. As of August, we had reported that the decline in sales this Q2 was a temporary phenomenon caused by the decrease in production, and we would aim to achieve the high rate of growth in the second half of the year as production and inventory returned to appropriate levels. Unfortunately, however, the result fell far short of our expectations, and sales also declined in the Q3. We were aware that consumers were turning away from the products due to the lack of stock in stores caused by the supply shortage in the first half of the year, so we made additional investments in marketing measures for our select and focused brands in order to recover from this. As a result, NARS turned positive in the Q3, but Drunk Elephant was slow to recover, and the negative margin widened.
In addition, there was a trend among consumers to trade down in the oppressive skincare market, and Shiseido also lost market share, resulting in a decline in our shipment sales. We are currently discussing the ideal brand, price range, channel, and management approach for our overall business in the Americas. Next, page 10, the European market continued to grow in all categories. Although sales in the Q3 were affected by the partial delay in shipments to the Q4, in the Q4, we launched an advanced cream from the Vital Perfection line and the cream from the Bio-Performance line in September and October, respectively, for Shiseido. By making solid investments in marketing for the media, we are planning to achieve growth in the high teens in real terms. Although this is preliminary data, shipments in October are progressing as planned.
In Asia-Pacific, the slowdown in the Taiwanese market, accounting for a large proportion of our sales, had an impact, but this was covered by growth in other major countries and regions, and SR Shiseido and Clé de Peau Beauté continued to grow. Next, on page 11, we will look at core operating income by segment. In Japan, we saw a significant increase in income due to not only higher sales but also an improvement in the gross profit margin due to a better product mix and price increase, as well as the effects of structural reform. There was also a one-off increase in income due to the deferral of some expenses, but we are continuing to make steady progress towards our target of over JPY 20 million in annual income.
As I explained earlier, inbound tourism is weaker than expected, and though sales are currently about half the size of the peak in 2019, we are still generating a profit, and we believe that we are steadily making progress in reforming our business structure to be able to generate profits locally. In China, despite a 9% decrease in revenue and a negative 9% in real growth rate for the Q3, profits increased by JPY 600 million. We are continuing to strengthen our marketing investments in key areas and are minimizing the impact of the decrease in revenue through structural reforms, such as the closure of unprofitable stores and personnel reduction, and building PL structure that generates healthy profits. In Europe, while shipments in the Q3 were significantly lower than expected, we continued to invest in marketing to maintain and accelerate customer purchases.
While sales increased and profits decreased in the Q3, we are aiming to improve profitability along with the recovery in sales in the Q4. In addition, although travel retail is our most profitable segment, the significant decline in sales has led to a fall in profits. This decline in travel retail sales has also had a significant impact in other segments, reducing internal sales and margins. As a result, overall profits for the Q3 fell by JPY 9.4 billion. Adjustments were also affected by the change in the elimination of unrealized profits, leading to a decline in profits. Last year, the adjustment for the elimination of unrealized profits had a significant positive effect due to a reduction in inventory in anticipation of a worsening outlook, mainly in China and travel retail. This year, the main factor was the decrease in profits as a reaction to that.
Next, page 12, we look at the global cost reduction and profit improvement measures that we are promoting as part of a global transformation. In the first half year, we generated JPY 7 billion in benefits, and in the Q3, we generated approximately JPY 4.5 billion in benefits. When combined with the expected benefits from the Q4, we expect to generate JPY 20 billion in benefits for the year, which is JPY 5 billion more than our initial forecast. We are accelerating the implementation of structural reforms, mainly in China, focusing on reducing fixed costs, and also in Europe, United States, Asia, and our plants, by improving costs and optimizing logistics on a global basis. Next, page 13, I will talk about the progress of the structural reform program in Japan. Mirai Shift NIPPON 2025 improvements in both profitability and productivity are steadily progressing.
First, in terms of profitability, the growth of core brands through selection and concentration, the implementation of strategic price increases, and improvement of the product mix through the launch of new and high-end products in the mid-price range have all contributed to an increase in the gross profit. We have also been able to create a number of hit products based on the technological capabilities, such as the one shown in the photo. Our success is underpinned by a marketing strategy that emphasizes returns, with a focus on concentrating investment in core brands and changing communication for the same products to lead to a dramatic sales growth. Furthermore, we are reviewing the optimal way to operate our business and have closed our Harajuku flagship store and our global flagship store in Ginza, as well as terminating our office lease.
In addition to improving profitability, we are also working to improve cash flow and improve capital efficiency by reducing our balance sheet. Turning to productivity, although we significantly reduced our workforce at the end of September through our early retirement support plan, we have not seen a decline in sales momentum during the transition period, thanks to the improvement in the employee productivity and optimum personnel allocation that we have been working on as part of our structural reform. Personal Beauty Partners are implementing reforms aimed at increasing sales per person, and we are promoting optimum personnel allocation and the activation of activities that make the most of digital and specialist skills in order to maximize our customer contact points.
We are also promoting productivity improvements for sales staff by transferring authority and responsibility to the frontline so that decisions and actions can be made quickly and from the frontline in terms of operation. Next, page 14, we will explain the outlook. As I mentioned at the beginning of this presentation, we have revised our four-year outlook in light of the significant changes in the market environment. The main reasons for this are the lower-than-expected sales in travel retail in China and the delayed recovery in the Americas, which I will explain in more detail in the next slide. In light of these factors, we have revised our initial focus of 8% real growth to a -1% for the year and +6% for the Q4.
Although this means that we are moving from a negative 8% in the Q3 to a positive figure, given the low hurdle caused by the impact of treated water in China last year, we are not placing too high a growth rate. And based on the initial response to Double 11, etc., we are confident in the accuracy of our forecast. We are also revising our forecast for the core operating income to JPY 35 billion and for profit attributable to the owners of the parent to JPY 6 billion. We will maintain the year-end dividend at the current level for now, but we will continue to monitor the situation closely and conduct a thorough review. Finally, on page 15, we will look at the difference between the previous focus for four-year core operating income.
The decrease in marginal income due to lower sales in travel retail, China, and the Americas was partially offset by flexible cost controls and effects of structural reforms. There was an increase in income due to the depreciation in yen, but the impact of the decrease in income in the high-margin travel retail business was significant. The core operating income is expected to be JPY 35 billion, a decrease of JPY 20 billion. Despite these difficult circumstances, we will steadily work on the issue we currently face in order to ensure that we can steadily increase profits and improve profitability in line with the strong revenue growth in Japan, our home country, and to build a new business foundation that can generate a stable revenue for the entire company. That is all from me.
In the earnings announcement in August, I mentioned that a briefing session would be held at the end of November. Today, I would like to take this opportunity to touch on how we view the coming two years, 2025 and 2026. Since 2023, we have been advancing our midterm business strategy, SHIFT 2025 and Beyond. This slide here outlines the objectives we have aimed under the SHIFT 2025 and Beyond strategy, which was announced in February of this year. Aiming for sustained profit growth and the building of a resilient business structure, we have been working on these initiatives with the full commitment of the entire company. As for global cost reduction, as Hirofujisan already mentioned, we are already seeing results for 2024 exceeding the initial target of JPY 15 billion. We will continue to make steady progress to achieve the target of over JPY 25 billion planned for 2025.
Regarding the reforms aimed to improve profitability in Japan, we have been driving the initiatives last year, and we are steadily seeing improvements in both profitability and productivity. However, in order to achieve the target of JPY 50 billion in Core Operating Profit next year, Japan, the largest and most important mother market, must aim for even higher levels of earnings potential. On the other hand, while we have been aiming for high-quality growth in China and Travel Retail within the framework of stable growth, the market has experienced negative growth, and the outlook for the future is not optimistic. Given the significant impact of the situation, we believe a strategic review is necessary. As a result of the review of the strategies in China and Travel Retail, while the Americas, India, and Asia-Pacific have been achieving growth, there is a need for greater focus on improving profitability moving forward.
Regarding the growth momentum of our core brands, given the market environment changes, we believe that a review and strengthening of our approach is necessary. In response to the significant changes in the market, the company, as one team, will face the reality with a strong sense of urgency to complete the transformation we initially set out to achieve, which is to build a more resilient organization and profit structure that is less dependent on market conditions globally. In order to achieve this, the strategic direction for the years 2025 and 2026 will focus on formulating a business plan that does not rely on excessive growth, establishing a profitable revenue structure even under challenging market conditions, and, instead of blaming the market environment, concentrating on controllable factors and thoroughly executing countermeasures ourselves.
The key difference from the past is that we are starting with the mindset of letting go of excessive growth expectations and optimistic assumptions, and instead building a profitable structure even under challenging market conditions. The must-win battles for our company are the six listed here, and we will prioritize these efforts for 2025 to 2026. These are all initiatives that we can execute to achieve results through our own efforts and decisions. By carrying them out with strong determination, we aim to build a foundation for growth.
Next, on page 19, of the six must-win battles, the top priority is to reduce costs. In addition to the more than JPY 40 billion over the two years, 2024 and 2025, we have also accumulated measures at the JPY 25 billion level. We will expand these key areas to the entire global company, and we will implement cost structure reforms and cost reductions without exceptions throughout the company. Please turn to page 20. First, we will accelerate structural reforms over the two years from 2025 to 2026, and we will improve profitability through further structural reforms, and we will rebuild the foundations to ensure that we can escape from the current critical situation and achieve sustainable growth thereafter.
On page 19, we mentioned cost reduction as part of establishing a highly profitable structure, but of course, we must not fall into a state of shrinking equilibrium by focusing solely on cost reduction. In order to realize our goal of becoming a personal beauty wellness company, we will promote the establishment of the strong brand structure in order to nurture global brands in the prestige skin beauty domain, which is our core domain.
Regarding advancing business management, in addition to fundamentally strengthening financial governance, we would like to build a new global operational structure that can create value with the aim of improving operation efficiency and strengthening organizational capabilities through greater collaboration between regional businesses and the global headquarters on the global scales. I would like to explain these details at the end of November. The key to moving forward with this is our action guideline, Act and Deliver. We will pursue our commitment to taking action ourselves and delivering results. Naturally, I am prepared to take the lead in this. To be honest, the next two years will not be easy, but I am confident that we will be able to overcome this and become stronger. We need to be prepared for the next two years to be a critical period.
As I explained at the press conference when I was appointed COO, my motto is not leaving any issues for the next generation. I will stick to my original intention. I will do what I say I will do. From January and onwards, I would like to continue to actively engage in dialogue with investors as CEO. I would like to receive the feedback and review what needs to be reviewed and work to improve corporate value. As a new CEO, I will work to transform the company into one that can generate solid returns.
Thank you very much. Now we would like to go into the Q&A session. From JPMorgan Securities, Kuwahara-san. Hi, this is Kuwahara from JPMorgan Securities. Thank you for your presentation. Can you hear my voice? So it's one question per person. I think for the numbers for the business performance, I think it's there, but I think since we have the management here, I would like to ask questions regarding the post-structural reform. If you want us to wait till the end of November to hear the details, that is fine, but we want to hear I want to hear a little bit about, so for example, looking at global companies, for example, L'Oréal, your SG&As tend to be high, and I feel like that tends to be a heavy weight on you. That's about 10% plus in terms of profitability or pushing back the profitability.
So your company, where you should be aiming for this SG&A ratio, how do you see what is the appropriate level of SG&A? It doesn't have to be the midterm. It could be in the mid to longer term. To what level do you want to reduce the SG&A by 2026 to achieve this JPY 25 billion? So kind of to your ideal position by 2026, how much do you think you can achieve by then? It could be more of a qualitative comment as well. Okay, thank you. Then I would like to reply to your question. As for the detailed numbers, I do apologize. I cannot disclose or mention at the moment today, but as for our thinking in regards to your question, growth and cost structure, we try to look at it separately. And so growth, we look at it at a more harsh perspective. And while at the same time, what can we do to improve our profitability? What do we need to improve to improve our profitability? And that is how we look at all of our initiatives.
Up to this point, as Hirofujisan has explained earlier, we have done the cost structure reform in multiple aspects. And this year too, we have the JPY 15 billion yen of target, and we will be exceeding this JPY 15 billion yen target. And next year, JPY 25 billion yen in target. So for these numbers or the targets, what we needed the cost structure reform was Japan and also China and Travel Retail, which struggle with the market decline. And so but to aim this JPY 25 billion yen, which is another level, that has to be something that is done across the company, approaching on every aspect of the company. As for the target, which we aim as a company, as for that, if you can hold on till the end of November, I would like to touch upon it maybe end of November. Thank you very much.
So as you aim for a global beauty company, so that target or objective does not change. And so for that, the cost and the profit structure, you're aiming for somewhere that is in the to the level of other global competitors in the beauty industry. Is that quite the correct understanding? Yes, we do need that profit structure. Otherwise, our business is also something that proactively creates new value. So yes, we do need a certain level of profit. Otherwise, we can't challenge new things or make investments. So yes, looking at the global peers, the global competitors, we want to make sure to bring it to the level of the profitability of these global players. Okay, thank you very much.
Next from CLSA Securities, Oliver Matthew, please ask your question.
Hello, thank you for your presentation. I have two questions, or maybe just one question, actually. You mentioned travel retail and the China outlook is a little bit difficult, but could you comment a bit more on when you think you could see revenue growth again for those two markets? That is my question. And just to follow up to the previous question, could you be clear when you say you need to be at the right level of profitability? What is the kind of acceptable level for a cosmetics company for operating profit margin you consider? Thank you.
Okay, so thank you very much for the questions, and currently for the China, Clé de Peau Beauté and NARS are still growing. However, to our main brand, like a brand Shiseido, is a little bit suffering. So therefore, we really tackle and to recover to the brand Shiseido growth. This is our first priority. The second question is that for the target of the profitabilities, so today it's too early to commit to the target.
Okay, so just on travel retail, when do you think you might see some growth again?
You mean for the travel retail growth?
Yep, revenue growth, yeah.
Revenue growth, okay. So currently for the travel retail situations, so the number of the tourists is increasing. However, the conversion from the tourist to shopper has dropped a lot. And also for the purchase price per person, per tourist has also dropped. So therefore, first, we seriously take into account all such situations. And in addition, we also carefully manage the tourist sales and the non-tourist sales. So non-tourist sales is sometimes disruptive to our brands. So therefore, from now on, within the two years, we really manage to the non-tourist sales in order to keep it to the make it for the healthy sales. That's the target for the next two years.
Okay, thank you.
Next, Morgan Stanley MUFG Securities, Sato-san. Hi, this is Sato. Can you hear me? Yes. So you mentioned about the strengthening of the finance governance, and I've been looking at the news flow, and there's something I've been wondering about. In regards to M&A, not more in the recent performance, but I just want to ask about M&A for your company. I was questioning the FineToday's sales, but 20% of shares in June was sold with JPY 12.8 billion. And so that would be about JPY 64 billion to JPY 65 billion.
So the sales is sales, but looking at the cash flow and the value assessment, the deal negotiation, I don't feel like the deal negotiation was done right. And I thought the sales price was okay, but looking at the cash and the goodwill, at the time, Bloomberg was saying it could be about JPY 150 billion. But so in detail, what you've done in the past couple of years, I feel like the M&As have not been too necessarily with integrity to the shareholders. And I understand that the cosmetics, and I feel that the cosmetics brand is growing, but I question this. So as a management, how do you look back on that, reflect back on it, or have gotten learnings from it so that that could be utilized for your governance so that it could be placed in your next plans and strategic plans?
And so I do want this financial governance to be strengthened. But if what I have just mentioned is, there's a misunderstanding or if there's any direction of M&A or if there's a thinking around M&A direction as a strategy as a company, please let us know what you're viewing. For the financial governance, I do not have anything that I can talk to you about in detail at the moment, unfortunately. However, as you have mentioned, what you have mentioned to us, cash flow or more of the cash-centric financial governance is something that I myself have been wanting to focus on. So in that sense, looking back at the past M&As, what went well, what did not go well, that is not something that I would like to comment on at the moment.
However, I am certain that whatever M&As were done in the past, it was done appropriately with the appropriate strategy of the company at the time. But with that in mind, with your comment, we would like to take that back to see what we can do to strengthen our financial governance. Thank you very much. I would like to get some comments around that in your next mid to long-term strategy announcement. Thank you.
Next, Yamanaka-san from SMBC Nikko Securities. I'm very sorry. My name is Yamanaka from Nikko. I have a quick question on the reduction of fixed costs and also re-evaluation of the source of profit. And next year and the year after, so in the next two years, the Americas are going to be important as a growth factor. So I wonder that there may be some factors that may affect that effort.
For instance, in China, if the pricing is not working well for certain brands, perhaps you understand that there's a movement to rebuild the brand. In particular, you mentioned the rebuilding of the brand Shiseido is very important, so are there going to be needs to make an investment for growth. So your question is about the temporarily reducing the investment for assisting growth. In regards to brand Shiseido, there's nothing fundamental that needs to be resolved, such as the too excessive inventory level in the market, and there's no such situation. What we need to do now is that, for instance, the 11/11 has started, the price discount and the price promotion in the overall promotion activities will be controlled for the sake of growth.
And of course, we need to make some investment for growth, but this is not the case of investment for changing the fundamental brand mix or brand structure. And the Chinese market, in any case, will shift dynamically. So in terms of the portfolio, we always need to try to optimize it. Thank you for those strategies to restrain the investment for growth in the U.S., for instance. Are you thinking of it? The U.S., our Drunk Elephant and NARS brands are in these markets. But as far as I'm concerned, I believe that there's still room for growth for the brand Shiseido in the Americas and other markets. So we have been selling these through the department stores, but we may be shifting to Sephora or Ulta Beauty. And that type of the retail-related transformation may be necessary.
So it is not that you do not expect that high cost, but not much growth and profitability. Am I correct to understand it that way? Yes. So in order to secure the growth, we would like to make an investment. And in order to secure the investment, we would like to succeed in cost reduction in the next two years. I understand now. Thank you very much.
Hirozumi-san from Daiwa Securities. Hello. Can you hear me? Thank you. One question, okay? Page 17, next year's direction. Japan segment was JPY 20 billion in Japan, and next year JPY 50 billion. Then that would mean that Japan will be very strong for next year. And the other segments will need a review. Or if I could say it directly, it's going to hold Japan back. So next year, core OP, looking at each of the segments. So is that right?
So, meaning that next year, Japan will be really driving and the other segments will be kind of being reviewed. Is that the right understanding? First of all, as for the overall direction, as I have mentioned, Japan will thoroughly implement and complete the structural reform. That does not change. And others, Americas, EMEA and Asia, growth is one thing, but on top of that, of course, the profitability improvement is something that we do need to work on for next year. And of course, as for the overall numbers, the performance, that is something that we will be sharing with you February of next year. Okay. So I understand the cost reduction, but how do you see acquiring the sales or capturing the sales? So yes, I get the cost reduction and I get Japan.
But for example, China, travel retail, EMEA, Americas, how do you view acquiring or raising the sales, growing the sales? As for that, the details of that, I would like to talk about it at the end of November. But the main storyline here is that we build a structure that will not be affected by the market environment. And in order to do so, China and travel retail, we must make sure that we're not leaning too much on China and travel retail. And so meaning that we do need to focus on growth on Americas and EMEA. And I think that would be the overall direction of our strategy. So November 29, is that the kind of things you will be able to mention to us as well? Yes. Okay. Then I look forward to November 29. Thank you very much.
From Mizuho Securities, Miyazako-san, please ask your question. Thank you for this opportunity. Global cost structure reform is my question. 2024, other than Japan, China, and travel retail, for the Asia-Pacific and the Americas and EMEA, you are growing. So what are you doing exactly? And also, JPY 25 billion, is there a breakdown by region for that? First of all, about the growth of GTC, EMEA, and others, and there's no one single factor affecting this. This is the buildup and accumulation of many small factors, such as gross margin, supply network, and also IT cost reduction are also included. And there's a product mix improvement and also a price increase in some of the products. All of these are constituting this growth outside of Japan and China.
Also, in regards to Japan and China as well, brand SKU mix improvement and also the closure of stores and also the cutting down on headcounts in China accelerated more than we had planned. From our expectation, their cost reduction is accelerated. We are now in good control of the cost. In regards to the JPY 25 billion for next year, as Mr. Fujiwara also said, the details are not to be shared at this point. You are close to the final numbers, right, already? You are close to achieving JPY 25 billion. Yeah, we are having active discussion on this point. Yes, so certainly we will make a comment at the end of November. One last thing. What about the 2025, JPY 25 billion? 2025, sorry, I couldn't hear you. JPY 25 billion for 2025 is your assumption? Yes, that's the original plan.
So JPY 44 billion for 2024 and 2025. Yes, we have no change in that plan. But then there's a JPY 5 billion upward revision. So can we expect that, or is it going to be accumulated in the original plan? So about the next year assumption, we would like to give a separate announcement. So we will make the all-out effort for controlling the cost without exceptions and seek every opportunity for cost reduction. And we are determined to do that. Thank you.
Thank you very much. From Jefferies, Kawamoto-san. Thank you very much. This is Kawamoto from Jefferies. Q3 sales, the situation. I want to confirm something. Page 26. Hirozumi-san mentioned about the top line, but from what we've been hearing, there's been a lot of talks about the cost control. So what about the sales? How should we view or understand the sales for next year?
This Q3, so I understand that Shiseido Drunk Elephant having a negative performance, but Anessa was minus, fragrance. The market is growing, I think. So why is that a minus? So you have many other brands outside of your brand Shiseido. For example, Anessa is very seasonal. So what is happening? And how will you be working on some of these other brands and areas for next year and onwards? Sorry, I may have missed part of your question, so I hope I can answer your question. Let me confirm later. But first of all, for the nine months year to date, to plan, the sales is below what is expected. And if we were to see it by region, TR has been the biggest category segment, which has been below what has been expected. And that is giving a very big negative impact across the company.
And next is China, followed by TR is China. And so therefore, within the brands, brand Shiseido, within the brands, brand Shiseido was the biggest decline or negative. But the other brands, for example, Clé de Peau Beauté in China, it was actually performing well. And so by region, the brands had different positives and negatives. So to the plan, what is the actual of each of the brands and how was it? Is that the kind of the intention of your question? So on page 26, I'm just looking at the overall. Kawamoto-san, I apologize. It's a little bit difficult to hear you. Maybe if you can bring the mic closer to you. On page 26, fragrance and Anessa. For example, I think the fragrance, the market is growing. Anessa is also a strong brand. So why are these two negatives? What's going on?
For fragrance, for Q3 on page 26, the minus that you see in fragrance, that is driven by the negative in EMEA. So Europe in Q3 was a temporary negative, as mentioned in the material of the business performance. But that's due to a time lag. The Q3 sales was pushed forward to Q2, and Q3 was pushed back to Q4. So there's some time lag that impacted the EMEA negative, making the fragrance look negative. And because within EMEA sales, the fragrance cover a lot of the chunk. So that is why the fragrance looks negative for Q3. However, Q4, we do have a boost plan. And EMEA, as mentioned in the earnings call, October numbers looked good. We're seeing good performance for October. So that is something that we are confident to be able to recover. So that is for fragrance. Now for Anessa, China and travel retail has driven this negative performance of Anessa. Understood. Thank you very much.
From Sumitomo Mitsui Trust Asset Management, Koguchi-san. Koguchi speaking. I hope you can hear me. Now, I have a question about the employee engagement and also the risk on the personnel. So you've reduced the headcount, but you're maintaining the revenue level according to your explanation earlier. It may be so in the short term, but when we look at mid to long term, can you maintain that? The motivation of the employees, is it maintained or going forward? How are you going to strengthen the motivation of the employees under the difficult circumstances? Unless there are exciting things, it may be difficult for employees to be able to enjoy working in the company.
So in the future, I fear that there may be some risks, for instance, some fraud. What is your thought of Fujiwara-san? If you can answer some qualitative response, that would be great. Or any assumption? Thank you very much for your question. One of the things that I'm happy that we've done was to make a solid investment in our core brand. That reached the customers. Our customers came to the shopfront seeking the products out of the brand. That was quite encouraging for our employees. This was highly appreciated by our retail partners as well. As our company, we are making investment into the brands. That creates the exciting products and also exciting workplace. That turned out to be very successful.
So there was 1,500 people who went for the package of early retirement. But even then, we increased the top line. And also the case of PBP or PB, so where people gather, we will dispatch the beauty consultant. And so this is the strength and also the meaning of the activities of the PBP. And we received very good feedback. And the risks or the roles that we need to overcome is that having said that, by losing 1,500 people, depending on the location, sometimes we face a shortage of personnel from what I gather. And there's some level of anxiety for the personnel shortage. And those voices have reached me. So then once again, we would like to revisit our criteria in dispatching people. And we will consult with the retail partners and to gain their understanding to improve upon the way we sell our products.
And lastly, I would like to add that I have been telling the Shiseido team to make profit. And so, making profit, the concept of making profit will be educated to all the PBPs, the Personal Beauty Partners, and so that what needs to be done to be able to be profitable. And we are continuing with our education. And we are receiving excellent feedback from these education activities. And our PBPs are now coming to understanding that what actions will result in higher profitability. And in addition to our cultural reform, we would like to accelerate the changes to the better direction with this education, continued education. Thank you very much for this forward-looking topic. I'm looking forward to your announcement at the end of November. Thank you.
With this, we would like to close the Q&A session. Thank you very much today. With this, we would like to close today's business performance call. Thank you very much for your participation today.