Yesterday, Kao released its financial report for the first nine months of 2024, showing a positive trajectory overall. Net sales increased by 5.7% from the previous year, reaching 1,190.0 billion yen ($7.79 billion). Currency translation contributed 3.6% to this growth, while like-for-like sales rose by 2.1%, driven by a 0.8% increase in volume and a 1.3% rise in price. Operating income rose significantly by 50.4 billion yen ($330 million), reaching 101.1 billion yen ($662 million), while income before taxes grew by 49.4 billion yen ($323.5 million) to 104.0 billion yen ($681 million). Net income also saw a substantial increase, up by 38.4 billion yen ($251.4 million) to 72.9 billion yen ($477.3 million).
In the Consumer Products Business, sales reached 921.5 billion yen ($6 billion), marking a 4.3% increase from last year, with currency effects adding 2.8% and like-for-like sales growing by 1.5%. Notably, while the volume dropped by 0.6%, price hikes added 2.1% to the sales increase. Global consumer preferences leaned toward cost-effective products, but demand for high-quality items persisted. In Japan, improved marketing through digital transformation and price adjustments bolstered profitability, despite a challenging Chinese market where economic slowdown affected personal consumption.
Regionally, sales performed variably. Japan saw a 4.0% increase to 589.2 billion yen ($3.86 billion), while sales in Asia dropped 5.1% to 161.4 billion yen ($1.06 billion), with like-for-like sales down 10.8%. Sales in the Americas rose by 13.7% to 104.5 billion yen ($684.3 million), or 3.8% on a like-for-like basis, and Europe recorded a 21.0% increase to 66.4 billion yen ($434.8 million), with like-for-like sales up by 9.5%. Operating income for the Consumer Products Business jumped by 45.9 billion yen ($300.8 million) to 77.5 billion yen ($507.5 million), thanks to restructuring efforts initiated in 2023.
In the Health and Beauty Care Business, sales surged by 9.1% to 314.7 billion yen ($2.1 billion), with currency effects contributing 4.7% and a like-for-like increase of 4.4% largely due to volume growth. Kao’s Global Sharp Top Strategy bolstered skin protection sales, and brands like Bondi Sands, acquired in 2023, positively impacted results. Hair care products also performed well, with strong sales from the JOHN FRIEDA brand in the Americas and Europe and successful launches in Japan. However, personal health product sales saw a decline. Operating income decreased by 4.7 billion yen ($30.8 million) to 25.6 billion yen ($167.6 million) due to restructuring costs.
The Cosmetics Business faced challenges, with sales dropping 1.1% to 173.2 billion yen ($1.13 billion). Despite a favorable market in Japan and new product successes in Europe with the SENSAI brand, like-for-like sales fell 3.7% overall. Japan’s strong performers included KANEBO skincare, ALLIE UV care, and SOFINA iP brands, but sales in China were significantly affected by restricted shipments aimed at controlling inventory amid market slowdown and increased competition. Operating income for the segment was negative, decreasing by 5.1 billion yen ($33.4 million) to a loss of 7.9 billion yen ($51.7 million).
