Earnings● Neutral
Kao Lifts Full-Year Forecast on Record First-Half Operating Income
Kao raised its full-year operating income forecast by ¥8 billion to ¥190 billion after a record first half, with gross margin above pre-pandemic levels.
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Kao Corporation raised its full-year operating income forecast after posting a record first-half profit, as reforms to earning power took hold. The company now expects operating income of ¥190 billion for the fiscal year ending December 2026, up ¥8 billion from its previous outlook. President and CEO Yoshihiro Hasebe presented the results during an earnings call Tuesday.
Operating income for the six months through June reached ¥95.8 billion, a record for the first half. Excluding a gain on land sales, operating income came in at ¥84.3 billion, the highest since fiscal 2019. Hasebe said the numbers confirm that the company's underlying earning power is strengthening steadily.
Net sales rose 7.8% from a year earlier to ¥871.9 billion. The company's gross margin in the GC business, which includes household and personal care products, recovered to above the pre-pandemic level of fiscal 2019. Hasebe attributed the improvement to a push for high value-added products and total cost reductions, or TCR.