KOSÉ (4922) Q3 2024 earnings summary

Executive summary

• Net sales for 1Q–3Q 2024 rose 9.0% year-over-year to ¥238.7 billion, driven by strong performance in Japan and Tarte, offsetting declines in mainland China and China travel retail.

• Operating profit increased 17.4% year-over-year to ¥18.8 billion, but profitability declined from the first half due to slowing growth in Japan and weak Greater China sales.

• Profit attributable to owners of parent dropped 28.4% year-over-year to ¥9.4 billion, mainly due to a ¥5.1 billion extraordinary loss from business restructuring in China.

Financial highlights

• Gross profit rose 7.5% year-over-year to ¥166.8 billion; operating margin improved to 7.9%.

• Ordinary profit slightly decreased by 1.8% year-over-year to ¥20.6 billion.

• Net income per share fell to ¥164.96 from ¥230.45 year-over-year.

• Capital expenditures surged to ¥18.2 billion from ¥4.9 billion year-over-year, mainly for the Minami Alps Factory.

• Profit before income taxes fell 10.1% to ¥18.4 billion.

Outlook and guidance

• 2024 net sales forecast revised up to ¥320.0 billion (+6.5% YoY), but operating profit forecast lowered to ¥18.0 billion (+12.6% YoY).

• Profit attributable to owners of parent revised down to ¥8.0 billion due to China restructuring costs.

• Full-year dividend maintained at ¥140 per share despite lower profit outlook.

• Japan and Tarte expected to remain strong; Greater China sales outlook significantly reduced.