Kao’s Profits Rise in Fiscal Q1

Thanks to a modest improvement in the global economy and the right product mix, Kao Corp. said Monday that sales and profits rose in its fiscal first quarter ended June 30, 2010.

The company said net profit grew 5.7 percent to 12.48 billion yen, or $141 million at average exchange, for the three months ended June 30.

Sales for the period increased 1 percent to 289.97 billion yen, or $3.28 billion.

Operating profit jumped 34.6 percent to 26.17 billion yen, or $295.8 million. The company incurred a one-time extraordinary cost linked to asset retirement — a factor that bit into net profits.

Kao’s beauty care segment posted an operating income of 1.8 billion yen, or $20.3 million. Sales for the division, which includes the Kanebo and Jergens brands, totaled 131.3 billion yen, or $1.48 billion, down 2.2 percent from the same period last year.

Kao attributed the drop in beauty care sales to the continued contraction of Japan’s high-end cosmetics market.

“The prestige cosmetics market in Japan continued to contract due to a shift in consumer preference to lower priced products, despite a sense that the market is bottoming out,” the company stated.