Kao: Hand soap offsetting falling demand for mass make-up

Kao: Hand soap offsetting falling demand for mass make-up

THE WHAT? Japanese beauty company Kao cosmetics has announced that healthy hand soap sales are set to offset slowing demand for the company’s mainstay make-up line, according to a report by Nikkei Asian Review. 

THE DETAILS Despite company forecasts of group operating profit seeing a rise 4% to 9% this year to between 220 billion yen and 230 billion yen ($2.02 billion to $2.11 billion), this does not account for disruption caused by the coronavirus. Ritsuko Tsunoda of JPMorgan Securities Japan estimated a 15% year-on-year decline in consolidated operating profit in the last quarter due to a fall in tourism in the country. 

However, talking to stakeholders, Kao stated it has seen a surge in demand for hygiene products amid the COVID-19 pandemic, including hand-washing products, alcohol-based sanitizer and antibacterial wipes.

CEO Michitaka Sawada stated at the meeting, “We will absolutely aim to increase our dividend for the 31st straight year.”

THE WHY? While Kao may be hit by the fall in tourist spend and footfall in stores, the global demand for hygiene and sanitation products is helping to bolster its financial forecasts. 

Strong sellers include Biore hand soap, with Kao to begin in-house sanitizer manufacturing at four domestic plants, which is set to increase its output 20 fold.  

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