Yesterday, POLA ORBIS HOLDINGS INC. (hereinafter referred to as “POLA ORBIS”) released its third-quarter report. According to the report, POLA ORBIS recorded net sales of 125.395 billion yen ($816.1 million) for the first three quarters of this year, down 1.1% from the same period last year, with an operating profit of 10.817 billion yen ($70.4 million), a decrease of 9.2% year-on-year.
In the beauty care segment, POLA ORBIS’s net sales for the first three quarters reached 121.487 billion yen ($790.6 million), down 1.4% year-on-year, while operating profit slightly increased by 0.2% to 11.731 billion yen ($76.3 million).
POLA ORBIS explained that the decline in net sales in the beauty care segment was mainly due to a reduction in revenue from its main brand, POLA. However, cost control measures allowed operating profit to remain stable compared to the same period in the 2023 fiscal year.
Breaking it down by brand, net sales for the main brand POLA dropped 6.2% to 68.333 billion yen ($444.7 million), with operating profit plunging 16.4% to 7.764 billion yen ($50.5 million).
In the third quarter alone, POLA’s net sales reached 22.366 billion yen ($145.6 million), down 3.2% year-on-year, while operating profit increased by 10.8% to 2.519 billion yen ($16.4 million).
POLA ORBIS disclosed that while consignment channel sales for the POLA brand remained weak, they showed signs of improvement due to the addition of more stores with online touchpoints and enhancements in customer experience value through services such as beauty treatments and skin analysis. Moreover, sales in department store channels sustained double-digit growth.
For overseas operations, POLA’s net sales decline slowed compared to the first half of the year but still fell by 12.7%, with the number of overseas stores dropping by five to a total of 157.
For another major brand, ORBIS, net sales reached 35.838 billion yen ($233.2 million), up 14.8% year-on-year, and operating profit soared 48.1% to 6.591 billion yen ($42.9 million). The group attributed ORBIS’s growth to an increase in customer numbers and individual customer purchase amounts in direct sales channels, as well as an expanded product lineup and strong sales growth in external channels.
Jurlique reported net sales of 6.014 billion yen ($39.1 million), up 2.3% year-on-year, but its operating loss widened to 2.193 billion yen ($14.3 million). POLA ORBIS explained that while Jurlique showed growth in Australia, it faced challenging conditions in mainland China and Hong Kong, with net sales in mainland China down 14.3% and a sharp 22.7% decline in Hong Kong. Additionally, a reduction in gross profit hindered improvement in Jurlique’s losses.
Net sales for emerging brands (such as THREE and DECENCIA) totaled 11.3 billion yen ($73.5 million), down 10.3% year-on-year, with an operating loss of 430 million yen ($2.8 million), showing some improvement over last year. POLA ORBIS noted that losses for these developing brands have been gradually improving overall. THREE has continued to focus on skincare, maintaining sales in Japan in line with the 2023 fiscal year, while DECENCIA achieved double-digit growth.
As for future strategies in China, POLA ORBIS stated that the group will continue marketing efforts in mainland China, targeting the high-end cosmetics market, and will aim to establish connections with new customers by expanding into affluent communities. Additionally, through a new store-opening strategy in mainland China, it plans to reduce the number of stores and improve profitability starting from the next fiscal year.
