Kao Raises Full-Year Profit Forecast After a Land Sale Flattered the First Half

Kao Corporation booked operating profit of ¥95.8bn for the six months to June 2026, up 38.5% from a year earlier, on revenue of ¥871.9bn, up 7.8%. Strip out an ¥11.5bn gain from a first-quarter land sale tied to a logistics-network overhaul, and operating profit was still ¥84.3bn, the strongest first half since 2019.

Profit attributable to shareholders rose 32.3% to ¥65.7bn, and Kao's return on invested capital improved 2.5 percentage points to 10.5%.

The improvement came from two directions. Global Consumer Care, the household and personal-care unit, generated sales of ¥649.5bn, up 7.2%, and operating profit of ¥65.7bn, up ¥11.1bn, as skin-care and cosmetics lines sold well in Japan and Asia. Kao's cosmetics business, long a drag on margins, turned in operating profit of ¥5.8bn against ¥0.3bn a year earlier, as the Curél and KATE brands drove a 10.5% sales increase. The chemicals division, which spans oleochemicals to semiconductor-processing agents, lifted sales 9.4% to ¥247.2bn and operating profit 26% to ¥18.1bn as price increases and stronger electronic-materials demand offset weaker fat-and-oil volumes.

Kao raised its full-year forecast from the outlook it gave on May 12: sales to ¥1.8tn from ¥1.75tn, operating profit to ¥190bn from ¥182bn, pretax profit to ¥193bn from ¥185bn, and profit attributable to owners to ¥135bn from ¥130bn.

Overseas sales climbed to 45.4% of the total from 44.2% a year earlier. Management flagged rising naphtha, crude-oil and fat-and-oil costs that typically hit its cost base two to three months after purchase, meaning the pressure will show up from the third quarter, alongside restructuring costs at underperforming overseas units. Kao left its full-year dividend forecast unchanged at ¥156 per share on a pre-split basis after completing a two-for-one stock split effective July 1.