Sales: $1.6 billion
Key Personnel: Satoshi Suzuki, president and chief executive officer; Naoki Kume, vice president, finance.
Major Products: Skin care, cosmetics, personal care and fragrance. Brands include Pola, Orbis, Jurlique, H2O Plus, pdc, Future Labo, Decencia, Orlane and Three.
New Products: White Shot Inner Lock IX beauty food, B.A and Orbis=U Encore anti-aging series, B.A Protector, Orbis=U White.
Comments: Corporate sales rose 8.4% in local currency, with beauty sales rising a bit faster (8.7%). Operating income for cosmetics surged nearly 29%. More than 90% of Pola’s revenue comes from sales of beauty products, but the company also has real estate holdings, pharmaceuticals and building maintenance.
Sales of cosmetics rose on the strength of the Pola brand, as well as continuing gains by the Three and Decencia brands. In its home market, tourists snapped up White Shot Inner Lock IX, a health and beauty food, which debuted in February. Later in the year, Pola introduced the B.A series, a line of anti-aging products developed around a “skin generation mechanism,” according to the company. Finally, in September, the company launched Orbis=U Encore, an anti-aging line of products that’s been heavily promoted on social media.
Outside Japan, sales declined in South Korea, a drop that Pola blamed on one-time accounting measures. Sales of Jurlique increased due to a solid performance in Australia that got a lift from higher purchase rates of store visitors and a rise in customer spending. In contrast, Pola described business conditions in China as “severe,” due to a department store slump. Those conditions forced H2O Plus to close underperforming stores in the country. H2O Plus took the same measure in the US, and as a result, international sales fell on the year.
With the Japanese economy attempting another comeback, Pola’s outlook for the rest of 2016 is modest. The company forecasts corporate sales will rise 2%.
But with Q1 in the books, Pola executives may want to rethink their estimates. Corporate sales rose 9% in the first quarter, led by a 9.2% increase in beauty care sales. Sales in Japan got a boost from the rollout of B.A Protector, a daytime anti-aging cream with UV protection.