Kao nine-month earnings up 12% despite poor Japanese confidence

Japanese cosmetics group Kao announced on Monday solid net earnings growth during the first nine months of fiscal 2017 and maintained its prior forecast for the full-year, despite lacklustre consumer confidence in Japan.

Net profit for the nine-month period rose 11.7 percent to 96.4 billion yen (730 million euros), according to a press release. The statement failed, however, to detail any activity results from the most recent quarter. 

Operating profits from January to the end of September grew 5 percent, to 137.8 billion yen, while total sales hit 1,080 billion yen (close to 7.6 billion euros), an increase of 2.4% on last year, or 6 percent at constant exchange rates.

Across the group's main division, consumer products, sales dipped 0.2 percent during the nine months, but increased 4.5 percent at constant exchange rates, on the back on solid growth in Asia (excluding Japan), particularly in China and Indonesia, as well as in the Americas. 

However, the weakening consumer demand in Japan did affect Kao's global sales growth, with the group remainig dependent on the archipelago nation, across all its business divisions. During the first nine months of the year, Kao said 65 percent of total sales took place in its domestic market, hardly a shift in market power compared to last year's share of 67.3 percent.

From January to September, "the Japanese cosmetics market, including e-commerce, was stagnate, with the exception of sales made by foreign tourists,"  highlighted the group in a statement.  

The firm confirmed its 2017 guidance: a net profit of 138 billion yen (+9 percent on last year), operating profit of 200 billion yen (+7.8 percent) and a sales increase of 0.9 per cent, to 1,470 billion yen.