Kao (4452) Q2 2026 earnings summary

Executive summary

• Operating income for H1 2026 reached a record high of ¥95.8 billion, or ¥84.3 billion excluding a gain on land sale, the highest since FY2019.

• Net sales grew 7.8% year-over-year to ¥871.9 billion, with like-for-like growth of 3.4% driven by volume and price increases.

• Gross margin improved to 39.8%, surpassing FY2019 levels, driven by high-value-added products and cost reduction initiatives.

• ROIC improved to 10.5%, reflecting ongoing capital efficiency reforms.

• Comprehensive income surged to ¥90.6 billion from ¥19.3 billion, reflecting strong operational and currency translation gains.

Financial highlights

• H1 net income rose 33.9% year-over-year to ¥66.2 billion.

• EBITDA increased 25.6% to ¥140.6 billion.

• Basic EPS grew 35.9% to ¥72.58.

• Q2 net sales rose 9.4% year-over-year to ¥458.7 billion, with operating income up 33.0% to ¥50.9 billion.

• Cash flows from operating activities were ¥55.3 billion, up from ¥42.9 billion year-over-year.

Outlook and guidance

• FY2026 net sales forecast revised to ¥1,800.0 billion (+6.6% year-over-year).

• Operating income forecast raised to ¥190.0 billion (+16.2%), with operating margin expected at 10.6%.

• Net income attributable to owners projected at ¥135.0 billion (+12.4%).

• Basic EPS forecast at ¥149.21, reflecting the share split.

• Management expects continued global economic uncertainty due to geopolitical tensions and supply chain costs but plans to mitigate impacts through procurement, cost reduction, and price adjustments.