Kobayashi Pharmaceutical (4967) Q3 2025 earnings summary

Executive summary

• Q3 cumulative sales fell 2.1% year-over-year to 112.0 billion yen, and operating income dropped 32.3% to 11.4 billion yen, mainly due to the red yeast rice (benikoji) incident and increased costs.

• Net income attributable to owners rose 27.4% to 6.8 billion yen, reflecting lower extraordinary losses compared to the prior year.

• Net sales were about 3 billion yen below plan, but operating income exceeded plan by approximately 4 billion yen due to delayed advertising spend and cost management.

• Compensation for health damage from the red yeast rice incident is ongoing, with 500 individuals confirmed eligible and 180 payments completed as of October 31, 2025.

• Sales rebounded in Q2 and Q3 as advertising resumed and new products launched.

Financial highlights

• Q3 net sales: 112.0 billion yen (down 2.1% YoY); operating income: 11.4 billion yen (down 32.3% YoY); net income: 6.8 billion yen (up 27.4% YoY).

• Gross profit margin for Q3 cumulative: 52.5%.

• EBITDA for Q3 cumulative: 17.9 billion yen (down 21.5% YoY).

• Extraordinary loss related to red yeast rice products: 3.3 billion yen cumulative, down from 9.9 billion yen prior year.

• Shareholders’ equity ratio remained strong at 80.8%.

Outlook and guidance

• No revision to full-year forecast: net sales projected at 171.0 billion yen (+3.3% YoY), operating income at 14.0 billion yen (-43.7% YoY), ordinary income at 15.3 billion yen (-43.0% YoY), and net income at 10.5 billion yen (+4.3% YoY).

• EPS forecast for FY25: 141.25 yen.

• Additional advertising investment planned for Q4; risk of sales shortfall if mild winter impacts demand.

• Part of Q3 operating income surplus to be invested in Q4, with some expected to remain as profit.