Recovering demand in the crucial Hainan offshore duty-free market helped drive +16.4% year-on-year sales growth to ¥11.3 billion (US$71.1 million) in Asia for KOSÉ Corporation in Q1 2026.
Besides the Hainan uptick, the company attributed the strong performance to a strengthened product line-up ahead of Lunar New Year.
The Asia result partially offset broader pressures across the company’s portfolio.
KOSÉ Corporation Executive Director & Group Chief Financial Officer Shinichi Mochizuki said, “Sales in Asia were ¥11.3 billion (US$71 million), up ¥1.5 billion (US$9.4 million) or +16.4% from the same period last year, thanks to the contribution of duty-free sales in China.
“Regarding duty-free sales in China, while monitoring appropriate inventory levels, performance was boosted by a strengthened product assortment for the Chinese New Year and a recovery in demand in Hainan Island. We believe that sales bottomed out in the previous fiscal year.
“In travel retail, we will continue to aim for healthy growth in the Greater China market while controlling shipments to protect brand value,” he added.
Appropriate Hainan inventory levels
China duty-free inventories (principally in Hainan) were maintained at suitable levels, the company said. Groupwide sales in Mainland China also benefitted from the success of a major ecommerce sales event and the strong performance of US skincare brand Tarte, in which KOSÉ acquired a 93.5% stake in 2014.
However, Tarte and Hainan’s strong sales were offset by lower figures from ALBION and KOSÉ Cosmeport which weighed on overall group results.
The Japanese beauty house reported consolidated net sales of ¥78.2 billion (US$492 million) for the three months ended 31 March, a -0.9% year-on-year decline, or -2.2% excluding foreign exchange impacts. Overseas sales accounted for 38.5% of total revenue.
Operating profit declined -84.5% year-on-year to ¥1.03 billion (US$6.5 million), with weaker earnings at ALBION and KOSÉ Cosmeport impacting consolidated performance.
Ordinary profit fell -54.3% to ¥2.36 billion (US$14.9 million) despite a higher foreign exchange gain linked to yen weakness.
KOSÉ said sales at the Thai PURI fragrance business, acquired in late 2024, increased on the back of firm performance in Thailand and the opening of new stores.
Mochizuki commented: “The PURI business has remained strong due to a recovery in the number of Chinese travellers. Going forward, we plan to strengthen the fragrance category, introduce new products and expand market share, and further solidify the brand’s presence by accelerating store expansion, particularly in Japan, Hong Kong, Singapore, China, Macau and other Asian markets.”
Profit attributable to owners of the parent company totalled ¥426 million (US$2.7 million), marking a -91.9% decline from the previous year. The company noted that the prior-year comparison included a ¥2.72 billion (US$17.1 million) gain on the sale of non-current assets.
Sales in the cosmetics business segment rose +0.6% year-on-year to ¥63.9 billion (US$402.1 million). This was driven by stronger performance in the high prestige and prestige categories, with sales from Tarte and DECORTÉ offsetting lower sales at ALBION.
In the prestige category, sales rose on the back of strong performance from ONE BY KOSÉ.
In the cosmetaries business segment, sales declined -7.8% to ¥13.6 billion (US$85.5 million) due to advance shipments recorded in the fourth quarter of 2025 amid anticipated strong demand for core KOSÉ Cosmeport products.
Sales in the others business segment increased +2.1% from the same period of 2025 to ¥693 million (US$4.4 million).
KOSÉ said there are currently no changes to its full-year consolidated earnings forecast. The company is targeting +8% year-on-year sales growth and +61% operating profit growth for the remaining nine months from April to December 2026. ✈
