Kao (4452) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 reached ¥413.2 billion, up 6.0% year-over-year (2.5% like-for-like), with operating income at ¥44.9 billion (+45.3%) and a margin of 10.9%.

• Growth was led by the Global Consumer Care Business in Japan and abroad, with strong contributions from Cosmetics in Asia (+11%) and Health Beauty Care in the Americas (+8%).

• Operating income included an ¥11.5 billion gain from a land sale; excluding this, operating income rose 8.0%.

• Net income attributable to owners increased 35.7% to ¥31.0 billion; basic EPS was ¥68.53, up 39.3%.

• Business results exceeded internal plans despite global economic uncertainty and inflationary pressures.

Financial highlights

• Net sales increased by ¥23.4 billion (+6.0%), with gross profit up 7.2% to ¥158.7 billion and gross margin rising 0.4 pts to 38.4%.

• Operating income rose by ¥14.0 billion to ¥44.9 billion (+45.3%), and net income attributable to owners of the parent increased by 35.7% to ¥31.0 billion.

• EBITDA grew 28.3% to ¥67.2 billion, and basic EPS rose 39.3% to ¥68.53.

• Comprehensive income swung from a ¥4.6 billion loss to ¥43.8 billion, reflecting FX gains.

• Total assets decreased by ¥43.9 billion to ¥1,831.2 billion, mainly due to lower cash balances.

Outlook and guidance

• FY2026 net sales forecast at ¥1,750 billion (+3.6% YoY), operating income ¥182 billion (+11.3%), net income attributable to owners ¥130 billion (+8.3%).

• No change to the full-year forecast despite ongoing geopolitical and supply chain risks; company to mitigate via global procurement and price pass-through.

• FY2026 basic EPS forecast at ¥143.70 (post-share split basis).

• Recovery in Chemical Business profits anticipated from Q2 onward.