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Net Sales Up for Pola Orbis in Q1 2014

Posted: April 30, 2014

Pola Orbis announced its summary of financial results for the three months of the fiscal year ending December 31, 2014 (consolidated). Net sales for the period were ¥50 billion, a 21.8% increase from the same time period in 2013. Operating income was up 240.6% to ¥5.4 billion, ordinary income increased 140.6% to ¥5.1 billion and net income was ¥2.47 billion, an increase of 96.3%. This reflected the impacts of new product launches for flagship Pola Orbis brands, and a demand surge for domestic (Japanese) brands ahead of a hike the consumption tax.

In the first quarter of the fiscal year ending December 31, 2014 (January 1–March 31, 2014), the Japanese economy recovered modestly as personal consumption picked up amid government economic measures and monetary policies that improved the employment and income rates, with demand surging ahead of a consumption tax hike. Despite uncertain prospects because of downside risks from an economic slump overseas and concerns about the consumption tax rise fueling a slowdown in personal consumption, the Japanese economy looks to set to continue recovering.

The domestic (Japanese) cosmetics market improved overall as a result of the momentum of a recovery in the Japanese economy. The overseas cosmetics market continued to expand steadily despite economic slowdowns in China and elsewhere in Asia.

The company’s beauty care division—which includes brands Pola, Orbis, PDC, Future Labo, Orlane, Decencia, Three, Jurlique and H2O Plus—saw net sales of ¥47 billion, up 22.25 year-on-year, and operating income was ¥5.2 billion, up 257.6% year-on-year.

The Pola brand made a concerted effort to boost customer satisfaction this quarter. High-end items enjoyed particularly strong sales as the consumption tax fueled demand, and the overseas markets grew steadily for the brand, as department stores attracted more customers in the key Chinese market. As a result, Pola recorded net sales above those recorded in the same period in 2013. Orbis focused its efforts on improving its skin care-focused product strategy, reinforcing sales online and leveraging new infrastructure systems to evolve customer communications. Customer number and per capita spending rose due to the impending consumption tax increase, and in overseas markets, Orbis continued to work to increase brand awareness. As a result, it also exceeded its 2013 Q1 sales. Meanwhile, due to strong sales of Three and Decencia, sales of the company’s brands under development were up from 2013, reflecting strong demand ahead of the consumption tax. For its overseas brands, Pola Orbis endeavored to maintain high expansion and contribute to revenues and earnings, focusing on Asia as a growth driver. The Jurlique business expanded, centered on the Chinese market, while H2O Plus enjoyed favorable sales in North America. As a result of these factors, overseas brand sales increased year-on-year.

Additional details about Pola Orbis’ first quarter 2014 sales results can be found here.