Kao (4452) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 reached JPY 413.2 billion, up 6.0% year-over-year and 2.5% like-for-like, driven by volume and price increases.

• Operating income surged 45.3% to JPY 44.9 billion, aided by a one-time JPY 11.5 billion gain from land sales; excluding this, operating income rose 8.0%.

• Net income attributable to owners increased 35.7% to JPY 31.0 billion; EPS rose 39.3% year-over-year to JPY 68.53.

• Growth was led by the Global Consumer Care (GC) Business in Japan and strong contributions from Cosmetics in Asia and Health Beauty Care in the Americas.

• The company maintained its full-year earnings forecast and progress on the K27 mid-term plan despite global economic uncertainty and inflationary pressures.

Financial highlights

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

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

• EBITDA grew 28.3% to JPY 67.2 billion.

• ROIC improved to 10.1%, up 2.6 percentage points year-over-year.

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

Outlook and guidance

• Full-year consolidated results forecast remains unchanged, with FY2026 net sales forecast at JPY 1,750 billion (+3.6% YoY), operating income JPY 182 billion (+11.3%), and net income attributable to owners JPY 130 billion (+8.3%).

• Anticipates profit recovery in the Chemicals segment from Q2 onward as price pass-through improves in the Americas and Europe.

• Integrated operations and supply chain resilience are expected to support stable supply and flexible adaptation to market changes.

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

• Progress toward K27 is on track, with improved prospects for success.