David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Going out can take quite a toll. You run through money, lose sleep, and eventually that layer of foundation stops concealing how tired you're looking.

It's a situation cosmetics giant Shiseido should be familiar with. Its push to escape Japan's demographic decline by partying with a younger set overseas has pushed the majority of its assets offshore. Global business accounted for 63 percent of sales during the 2015 fiscal year ended Dec. 31, the company said Tuesday. The hangover comes a bit further down the income statement -- all that revenue translated into just 5.6 percent of operating income.

Pump Up the Volume
Operating margin at Shiseido divisions, annual
Source: Company reports
Note: 2014 figures have been adjusted due to change of reporting period

The weakness of Shiseido's overseas business has become a drag on the company as a whole. At 478.8 billion yen ($4.2 billion) in revenues, it accounts for a smaller share of profits than its `Other' division, which owns duty-free shops and a chain of fancy cafes.

That's left Shiseido with profit margins well below those of its global competitors such as L'Oreal, Estee Lauder and Amorepacific, despite having a domestic business that stands eye-to-eye with them:

Trailing 12-month operating margin at major cosmetics companies
Source: Bloomberg data

President Masahiko Uotani is moving in the right direction by promising to focus on more higher-end products. Shiseido's operating margin in the most recent 12-month period was a distinctly un-luxurious 4.9 percent -- not a great return on its 192 billion yen marketing budget.

He could also look at giving his supply chain a tune-up. Shiseido's products gather dust on the shelves for about six months before they're sold, some three months longer than Amorepacific's and L'Oreal's, according to data compiled by Bloomberg:

Not Flying Off the Shelves
Inventory days at major cosmetics companies
Source: Bloomberg data

Beyond that, what Shiseido needs is a smidgen more self-belief. Decades of economic stagnation at home have given parts of corporate Japan an inferiority complex when it comes to the domestic market, something that's also afflicted brewer Asahi in its quest for new overseas business. But sales at home for Shiseido rose 10.9 percent, more than twice the 5.1 percent for global after accounting for currency movements.

Thanks to the weaker yen, more of the world is coming to Japan in the form of tourists as well. Chinese holidaymakers who helped boost sales from Tiffany's Japanese jewelry stores have also been spending on beauty products.

Shiseido once vied with South Korea's Amorepacific for the position of Asia's leading high-end cosmetics business. Its market capitalization is now barely a third and looks likely to fall further. Its forward price-earnings ratio of 31 -- only a touch behind Amorepacific's 34 and ahead of Estee Lauder's 27 and L'Oreal's 24 -- seems hard to justify until business improves.

Still, as any make-up artist would tell you, confidence is just as important to putting on a good face as picking the right shade of eyeshadow. Shiseido needs to start playing to its strengths rather than compensating for its weaknesses. Because it's worth it.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
David Fickling in Sydney at

To contact the editor responsible for this story:
Katrina Nicholas at