KOSÉ (4922) Q1 2025 earnings summary

Executive summary

• Net sales rose 1.8% year-over-year to ¥78.9 billion, driven by strong ALBION performance in Japan and product development, offsetting declines in North America and other regions.

• Operating profit fell 15.7% year-over-year to ¥6.6 billion due to a higher cost of sales ratio, increased SG&A expenses, inventory provisions, and costs from newly consolidated Puri.

• Profit attributable to owners of parent dropped 23.8% year-over-year to ¥5.2 billion, impacted by foreign exchange losses and higher costs, despite a gain on sale of fixed assets.

• Ordinary profit declined 49.8% to ¥5.2 billion, mainly from foreign exchange losses linked to yen appreciation.

• Overseas sales accounted for 34.5% of total sales; comprehensive income declined 73.5% to ¥2.5 billion.

Financial highlights

• Gross profit increased by ¥0.5 billion year-over-year to ¥56.6 billion, but the gross margin declined to 71.7% from 72.3%.

• SG&A expenses rose 3.6% year-over-year, mainly from administrative costs and Puri consolidation.

• Net income per share decreased to 92.75 yen from 121.69 yen year-over-year.

• Capital expenditures increased to ¥10.6 billion, and depreciation rose to ¥2.9 billion.

• Total assets at quarter-end were ¥377.3 billion, with an equity ratio of 71.7%.

Outlook and guidance

• Full-year 2025 sales are forecast to grow 4.1% to ¥336.0 billion, with operating profit expected to rise 15.2% to ¥20.0 billion.

• Net income attributable to owners of parent is projected to increase 83.7% to ¥13.8 billion, with EPS reaching 241.83 yen.

• Japan sales are expected to see mid-single-digit growth, while Asia and North America/Europe/others are forecast for mid- to high-single-digit changes.

• Management notes risks from global economic uncertainty, inflation, and trade friction, especially in China and the US.