Today, Kose Group released its financial report for the year 2024. According to the report, the company achieved net sales of 322.8 billion yen, marking a 7.4% year-on-year growth. Operating profit also showed a positive trend, increasing by 8.6% to 17.36 billion yen. Despite challenges in key markets, Kose’s overall performance was driven by robust growth in its high-end product segments and strategic expansion in overseas markets.
The Cosmetics segment saw a 6.2% year-on-year sales increase, reaching 255.3 billion yen. The high prestige category, led by Tarte and ALBION, experienced strong growth, offsetting a decline in DECORTÉ sales, particularly in Asia. While DECORTÉ recorded its highest-ever sales in Japan, overall sales declined due to weaker performance in China and other Asian markets. The prestige category performed well, driven by strong sales of SEKKISEI, ONE BY KOSÉ, and ESPRIQUE, which benefited from new product launches and effective sales promotions.
Despite the increase in sales, operating profit in the cosmetics segment declined by 15.8% to 15.05 billion yen, due to an increase in the cost of sales ratio caused by product mix changes and higher expenses for product disposal linked to global restrictions on certain ingredients.
The Cosmetaries segment outperformed the cosmetics segment in terms of profitability, with sales increasing 12.3% year-on-year to 64.7 billion yen. The growth was primarily driven by the strong performance of Softymo, CLEAR TURN, and MAKE KEEP MIST. Unlike the cosmetics segment, operating profit in the cosmetaries business surged by 137.3% to 6.98 billion yen, benefiting from strong sales and effective cost control measures. The segment also achieved an operating margin exceeding 10%, demonstrating high profitability.
In regions, sales in Japan saw a double-digit growth of 11.4%, reaching 211.4 billion yen. Despite a slowdown in cosmetics market growth in the second half of 2024, Kose’s domestic performance remained strong, thanks to increased tourism and a favorable reception for its key brands.
In the high prestige category, DECORTÉ recorded its highest-ever sales in Japan, driven by new and existing skincare products and the success of a newly launched base makeup product. ALBION also performed well, with strong demand for Elégance products, especially among foreign tourists. The prestige category saw double-digit growth, with SEKKISEI, ONE BY KOSÉ, and ESPRIQUE benefiting from new launches and promotional efforts.
Sales in Asia declined 23.0% year-on-year to 40.6 billion yen, reflecting ongoing challenges in China’s cosmetics market. The overall market in China struggled, with lower sales per customer and a shift toward budget-friendly products. During China’s major e-commerce sales event in November, sales declined across the entire cosmetics sector, despite the longest sales period ever set by platforms. Kose strategically avoided excessive price competition to protect brand value, which resulted in slower growth in the high prestige category. In the offline category, DECORTÉ faced challenges in both customer traffic and sales per customer, partly due to the reduction in GWP rates.
The travel retail sector also saw a decline in sales, as Kose implemented stricter shipment controls to clear slow-moving inventory.
North America delivered strong double-digit growth of 21.1%, with sales reaching 62.0 billion yen. The primary driver of growth was Tarte, which achieved record-breaking sales. E-commerce expansion and a strategic focus on lip and mascara products contributed to strong revenue gains.
KOSÉ forecasts a 4.1% increase in sales to 336,000 million yen in the fiscal year ending December 2025. Sales of major brands in Japan and at Tarte, which sells its products primarily in the United States and Europe, are expected to remain steady. This growth is expected to more than offset lower sales resulting from business reforms in mainland China and weakness in the travel retail sector. PURI CO., LTD. in Thailand (hereafter, PURI), which was acquired in December 2024, will make its first contribution to consolidated sales in 2025.
