Pigeon (7956) Q3 2024 earnings summary

Executive summary

• Net sales for the first nine months rose 4.2% year-over-year to ¥76,037 million, driven by Lansinoh, China, and Singapore, with FX tailwinds; income declined due to increased growth investments, especially in China.

• Operating income fell 16.7% to ¥8,481 million and net income dropped 25.5% to ¥5,426 million, reflecting higher SG&A expenses, mainly from China.

• Extraordinary income and loss of ¥698 million each were recorded, related to a government subsidy and a tax reduction for a new plant.

• Pigeon Manaka Corporation was divested and excluded from consolidation from the first half of FY2024.

Financial highlights

• Net sales: ¥76,037 million (+4.2% YoY); gross profit: ¥37,551 million (+4.5% YoY); operating income: ¥8,481 million (-16.7% YoY); net income: ¥5,426 million (-25.5% YoY).

• SG&A expenses rose 12.9% year-over-year, mainly from aggressive investment in China.

• Gross margin improved slightly to 49.4% from 49.3% year-over-year.

• Net income per share was ¥45.38, down from ¥60.86 in the prior year period.

• Total assets as of September 30, 2024, were ¥99,975 million, with net assets at ¥78,764 million and an equity ratio of 75.5%.

Outlook and guidance

• Full-year forecast remains unchanged: net sales expected at ¥101,000 million (+6.9% YoY), operating income at ¥11,400 million (+6.3% YoY), and net income at ¥7,600 million (+2.4% YoY).

• Net income per share forecast is ¥63.54; dividend forecast for FY2024 is ¥76.00 per share.

• Focus remains on strengthening existing areas, global expansion, and continued investment in China for sales recovery.