The $1.1 billion profit will allow Kao to increase its shareholders’ annual dividend, but the company must still improve the profit margins on its existing household products if it is to maintain growth, according to executives.
Kao’s overall sales rose 4% to $8.24 billion, including a 4% rise in revenue from household products, to $6.12 billion, on robust sales of its Healthya green tea. Sales of high-end products, such as those in Kao’s new hair care series Asience, also grew, executives said.
Sales of existing products, such as detergents, slumped due to falling prices. This decline was offset by the strong performance of Kao’s new products, which are higher priced and less susceptible to price drops.