Unicharm (8113) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 consolidated sales were 227.5 billion yen, down 3.7% year-over-year, with core operating profit at 29 billion yen, down 22.7%, mainly due to last year's high base and increased marketing investments.

• Profit attributable to owners of parent increased 39.7% to 24.9 billion yen, supported by insurance income and other factors.

• The operating environment remained challenging overseas due to economic uncertainty and competition, while domestic sales in Japan stayed strong, driven by demand for daily necessities and value-shifting in personal care.

• Overseas sales declined 7.1% and profit dropped 42.5%, with Asia impacted by negative publicity in China and slow baby care in Indonesia, but North America and the Middle East exceeded expectations.

• Annual dividend increased for the 24th consecutive year, with a buyback of approx. 12 billion yen in shares as of April 2025.

Financial highlights

• Net sales: 227.5 billion yen (down 3.7% YoY); core operating profit: 29 billion yen (down 22.7% YoY).

• Profit attributable to owners of parent: 24.9 billion yen (up 39.7% YoY); EPS: 14.18 yen (up 40.8% YoY), reflecting a 3-for-1 stock split.

• EBITDA: 47.0 billion yen (up 2.4% YoY).

• Gross profit margin deteriorated by 0.1 percentage points to 38.9%; sales and administrative expense rate worsened by 3.0 percentage points.

• Cash and cash equivalents increased to 287.8 billion yen, up 26.7 billion yen from year-end.

Outlook and guidance

• FY2025 sales forecast: 1,025 billion yen (+3.6% YoY); core operating profit: 146 billion yen (+5.4% YoY); net profit attributable to owners of parent: 86.4 billion yen (+5.5% YoY).

• Q2 is expected to see sales growth with flat operating profit YoY; over 20% operating profit growth targeted in the second half.

• Dividend forecast for FY2025 is 18 yen per share post-stock split.

• Strategic investments in Asia expected to drive recovery in core operating profit from Q2 onward.

• Proactive investment in feminine, wellness, and pet care segments in Asia; new product launches and e-commerce expansion planned in China.