Kao Corporation
4452・Prime Market・Chemicals
Hygiene and Living Care Business
A Japan- and Asia-centered daily hygiene business underpinning Kao's stable earnings base
| Period | Current | Previous | Change |
|---|---|---|---|
| Sales (Q1 FY2026, ending December 2026) | ¥128,972 million | ¥124,468 million | ↑ |
| Operating income (Q1 FY2026, ending December 2026) | ¥19,551 million | ¥16,726 million | ↑ |
| Operating margin (Q1 FY2026, ending December 2026) | 15.2% | 13.4% | ↑ |
| Sales growth rate (year on year) | Up 3.6% (real increase of 2.3%) | — | ↑ |
| Full-year sales (reference: FY2025, ended December 2025 actual) | ¥549,333 million | — | — |
| Full-year operating income (reference: FY2025, ended December 2025 actual) | ¥81,273 million | — | — |
Business Details
Comprises three categories: Fabric Care Products (laundry detergents and fabric softeners), Home Care Products (dishwashing detergents, household cleaners, and cleaning paper products), and Sanitary Products (feminine care products and baby diapers). Japan accounts for approximately 73% of sales, with the remainder centered on Asia (mainly China). Positioned as a "Stable Earnings Area" under the medium-term management plan "K27," the segment plays a role in supporting investment in growth-driver areas while maintaining high profitability and cash-flow generation capability.
Recent Overview
Domestic fabric care led growth via price revision effects, improving operating margin from 13.4% to 15.2%
In Q1 FY2026 (ending March 2026) (January to March), sales in the Hygiene and Living Care Business were ¥128,972 million (up 3.6% year on year, a real increase of 2.3%), and operating income was ¥19,551 million (up ¥2,825 million year on year). Fabric Care Products in Japan achieved significant sales growth and market share expansion through higher value-added products and price revision effects. Meanwhile, Sanitary Products saw a real decrease of 1.6% due to intensifying competition from "Merries" in Asia. Japan sales were solid, up 5.7% year on year to the equivalent of ¥94,700 million.
Key Products
Growth Drivers
- Higher value-added product proposals and price revision effects in the domestic fabric care market (Fabric & Home Care Products: real increase of 4.1%, price contribution of 3.2%)
- Solid domestic demand centered on steady growth in Japan sales (up 5.7% year on year)
- Partial recovery in Sanitary Products driven by the full-scale launch of integrated global operations for feminine care product "Laurier" in China and loyalty marketing
- Stabilization of the earnings structure through ROIC-focused cost reforms and promotion of co-creation with external partners (operating margin improved to 15.2%)
- Continued cash-flow generation as a Stable Earnings Area under the medium-term management plan "K27"
Risks
- Continued competitive pressure on baby diaper "Merries" in Asia (particularly China) (Asia sales: down 1.5% year on year, a real decrease of 6.1%)
- Cost pressure from rising raw material prices (natural fats and oils, petrochemical raw materials)
- Suppressed consumer sentiment and polarizing consumption behavior due to price inflation in Japan
- Sluggish demand in overseas markets, including a decline in Americas sales (down 6.2% year on year, a real decrease of 17.6%)
- Rising international supply chain costs and raw material procurement risk amid escalating tensions in the Middle East
Last updated: March 25, 2026