C'BON COSMETICS Co.,Ltd.

Business Details

C'BON Co., Ltd. operates under the corporate philosophy of "creating and expressing beauty," and is a single-segment company engaged in the manufacturing and sale of cosmetics and quasi-drugs centered on skincare products. The company manufactures in-house at its production center in Tochigi Prefecture, with its main sales channel being directly operated membership-based "C'BON Facialist Salon" stores. The company provides aftercare services such as counseling and Oriental-style treatments to member customers, with building long-term relationships with customers serving as the source of its competitive advantage. The company has four consolidated subsidiaries (JAFMAC Co., Ltd., Qianpeng (Shanghai) Cosmetics Co., Ltd., Clini Medic Co., Ltd., and Natural Yeast Research Institute Co., Ltd.).

Recent Overview

In FY2026 (ending March 2026), net sales rose 4.8% and operating income rose 48.1%, concluding the final year of the mid-term management plan with higher revenue and profit

For the full year of FY2026 (ending March 2026), the company achieved net sales of ¥9,267 million (up 4.8% year on year), operating income of ¥253 million (up 48.1% year on year), ordinary income of ¥282 million (up 63.5% year on year), and net income attributable to owners of parent of ¥214 million (up 56.8% year on year). In addition to the increase in sales, results were also boosted by the effect of a ¥153 million decrease in contract liabilities transferred to sales, resulting from a reassessment of the unit price for calculating services rendered following the end of transitional measures associated with the October 2023 revision of terms and conditions. Reduced resident tax burden from the acquisition of treasury stock and the recognition of the recoverability of deferred tax assets (income from adjustment of corporate taxes, etc.) also boosted net income. Starting in FY2027 (ending March 2027), the company will launch its new mid-term management plan (vision: "Resonating Beauty Together"), forecasting net sales of ¥9,527 million and operating income of ¥308 million.

Key Products

Growth Drivers

• Strengthening new customer acquisition: Through redesigning event exhibition booth designs based on the branding strategy and verifying cost-effectiveness, the number of new customer visits expanded to 109.4% year on year and new customer sales expanded to 119.6% year on year
• Cultivating loyal customers: Through the utilization of a "dedicated desk for loyal customers" and the continued holding of "Loyal Days," the number of loyal customers steadily increased, surpassing the target of 12,000
• Re-expansion of subsidiaries: Subsidiary sales grew significantly to 120.1% year on year through utilization of the BtoB procurement platform and expansion of direct-trade channels
• Improved profitability of the hair business: Both sales and profit trended steadily due to the entrenchment of awareness reform from neaf's revised evaluation system and the establishment of the mutual customer referral model
• Launch of the new mid-term management plan (FY2027 (ending March 2027) to FY2029 (ending March 2029)): Promoting five measures: "building an organization full of self-initiative," "deepening customer experience value," "improving production and quality control systems," "streamlining store operations," and "opening new store formats through synergy effects"
• Accelerating OMO strategy: Aiming to maximize LTV (customer lifetime value) by establishing a seamless purchasing experience integrating salons and e-commerce
• Strengthening R&D: Promoting the development of high-value-added products by incorporating over 1.89 million cumulative pieces of skin data and approximately 180,000 annual customer surveys into R&D

Risks

• Store staff shortages due to hiring difficulties: The number of customer interactions at directly operated stores has trended flat, with the number of continuing existing customers only slightly increasing to 100.5% year on year, constraining sales growth from continuing customers
• Rising prices and soaring raw material costs: Selling, general and administrative expenses expanded to ¥6,778 million (up 3.1% year on year) due to soaring raw material prices, rising prices associated with yen depreciation, and rising labor costs, posing a barrier to margin improvement
• Rising costs due to geopolitical risk: Geopolitical risks such as the situation in Iran pose a risk of pushing up procurement costs for cosmetics raw materials and packaging materials as well as logistics expenses through soaring crude oil prices and disruption of logistics networks
• Instability in overseas business: The intensifying global situation has caused issues such as shipment delays, creating a risk that diversification of sales channels toward Asia and Europe will not proceed as planned
• Impairment risk related to store fixed assets: In FY2026 (ending March 2026), an impairment loss of ¥39 million (2.3 times the prior period) was recorded as an extraordinary loss, requiring ongoing evaluation of store assets
• Fading of the temporary boost to sales from the decrease in contract liabilities: The transfer of ¥153 million in contract liabilities to sales, resulting from the end of transitional measures following the October 2023 revision of terms and conditions, was a one-time effect, and this effect will disappear from FY2027 (ending March 2027) onward