TOKYO — Kao Corp. said Friday that net income for its fiscal first quarter grew in the double digits compared with the same period a year earlier, due mainly to tax reasons. Sales for the period also increased.
The cosmetics and personal-care company’s net income for the three months ended March 31 rose 14.9 percent to 27.77 billion yen, or $254.08 million at current exchange rates. Operating profit for the period was up 2.2 percent year-over-year to 39.45 billion yen.
The company posted first-quarter net sales growth of 1.6 percent to 350.65 billion yen.
Starting with the current fiscal year, Kao has rearranged its business to include five segments instead of four. What was formerly called the beauty-care business has now been divided into the cosmetics business and the skin-care and hair-care business. The former includes brands such as Kanebo, Suqqu, Sofina, Kate Tokyo and Curél. The latter includes John Frieda, Oribe and Bioré.
Sales in the cosmetics business grew by 3.6 percent to 60.6 billion yen.
“Suqqu and Est The Lotion, which are available in the department store channel, and the Curél derma-care brand, which was newly included in this business from the three months ended March 31, 2018, continued their strong performance from the previous year,” Kao said in a release.
“Sales also grew substantially in Asia, mainly China. For the midprice and high-price cosmetics segments in Japan, which have issues, the Kao Group will conduct full-scale structural reform under its new management,” it added.
At the beginning of this year, Yoshihiro Murakami took over as president and representative of Kanebo Cosmetics.
In Kao’s skin-care and hair-care business, sales increased by 3 percent to 79.4 billion yen. While the Bioré brand performed well in Japan and elsewhere in Asia, it was impacted by stiff competition in the Americas. Sales of haircare products in Europe decreased, also due to intensifying competition.
Kao left unchanged its guidance for its current fiscal year ending Dec. 31. It expects net income to grow by 3.4 percent to 152 billion yen. The company forecasts its yearly operating profit will increase by 5 percent to 215 billion yen. It is predicting yearly net sales growth of 3.4 percent, for a total of 1.54 trillion yen.