TOKYO—Kao Corp. is still feeling the effects of the ongoing recession.
This story first appeared in the July 27, 2009 issue of WWD. Subscribe Today.
Net profit for the first quarter ended June 30 slid 31 percent to 11.80 billion yen, or $121.19 million at average exchange rates for the period. Sales decreased 9.4 percent to 287.21 billion yen, or $2.95 billion.
Operating profit also suffered, falling 24.4 percent to 19.44 billion yen, or $199.65 million.
First quarter sales from the group’s beauty care division, which comprises 46.7 percent of its business, dropped 8.1 percent to 134.29 billion yen or $1.38 billion. In like-for-like terms, they slid 4 percent.
“In Japan, the cosmetics market contracted with the same quarter a year earlier due to changing consumer purchasing sentiment,” the company said in a release. However, the household and personal care products market was firm.”
Kao did not revise its financial targets for the fiscal year ending March 31. The company expects its net profit to drop 13.1 percent to 56 billion yen or $593.38 million, while sales are seen declining 5.2 percent to 1.21 trillion yen, or $12.82 billion.
Kao said that there is a sense that the global economic downturn is slowing but consumer sentiment is not yet recovering. There is still too much uncertainty about the economy, the company concluded.