KOSÉ (4922) Q4 2024 earnings summary

Executive summary

• Net sales rose 7.4% year-over-year to ¥322.7 billion, driven by strong growth in Japan, North America, and Tarte, offsetting declines in China and travel retail.

• Operating profit increased 8.6% year-over-year to ¥17.3 billion, but profit attributable to owners of parent fell 35.6% to ¥7.5 billion due to a ¥4.4 billion extraordinary loss from China structural reforms.

• Overseas sales accounted for 34.5% of total, with Tarte and major Japanese brands performing strongly.

• Japan delivered double-digit sales growth across all channels, while Asia saw a 23% sales decline, mainly from China and travel retail.

• Announced acquisition of Panpuri (PURI CO., LTD.) in Thailand and strategic alliance with Foxtale in India to expand in ASEAN/India markets.

Financial highlights

• Gross profit increased to ¥100.1 billion, with a higher cost of sales ratio due to product mix and disposal expenses.

• SG&A expenses rose 5.1% to ¥205.2 billion, with higher personnel and general/admin costs, especially at Tarte.

• Ordinary profit grew 6.9% to ¥21.6 billion, aided by foreign exchange gains.

• Cash and cash equivalents at year-end were ¥107.7 billion, up 2.0% from the previous year.

• Net cash provided by operating activities dropped 39.6% to ¥18.4 billion.

Outlook and guidance

• 2025 consolidated sales forecast: ¥336.0 billion (+4.1%), with operating profit up 15.2% to ¥20.0 billion.

• Profit attributable to owners of parent expected to rise 83.7% to ¥13.8 billion, as no extraordinary loss is anticipated.

• Japan and Tarte projected to drive growth; China sales to remain weak but profitability to recover post-reforms.

• PURI CO., LTD. will contribute to consolidated sales for the first time in 2025.

• Dividend per share to remain at ¥140 in 2025.