ADJUVANT HOLDINGS CO.,LTD.

Business Details

The Group is a single-segment company that plans, researches, develops, and sells skin care and hair care products for hair and beauty salons, esthetic salons, nail salons, and other establishments. The mainstay subsidiary, Adjuvant Cosmetics Japan Co., Ltd., sells through distributors or directly to salons, and supports salons' in-store sales capabilities through counseling seminars and other services. Its products feature a non-oil, non-alcohol, and no-added-color formulation with a proprietary blend of sugar and minerals, meeting consumer demand oriented toward safety and peace of mind. Overseas, ADJUVANT GLOBAL COMPANY LIMITED (Hong Kong) operates the business. The number of actively transacting salons for FY2026 (ending March 2026) was 14,609 (up 1,943 from the prior period).

Recent Overview

While sales continued to decline, profits improved substantially due to reduced SG&A expenses and increased non-operating income

In FY2026 (ending March 2026), net sales were ¥3,813 million (down 6.9% year on year), marking a second consecutive year of declining sales. However, the company reduced SG&A expenses, including IT-related costs, advertising expenses, and R&D expenses, to ¥2,392 million (down ¥136 million year on year), and an increase in interest and dividend income received (total non-operating income of ¥30 million) also contributed, resulting in substantial profit improvement: operating income of ¥170 million (up 34.8% year on year), ordinary income of ¥200 million (up 48.3%), and net income of ¥142 million (up 251.1%). A gain on sale of investment securities of ¥21 million also boosted net income. The number of actively transacting salons expanded to 14,609 (up 1,943 from the prior period), reflecting an expanding customer base. For FY2027 (ending March 2027), the company anticipates increases in promotion expenses, personnel costs, and IT-related expenses associated with the launch of new products (one hair care line and two skin care lines), forecasting net sales of ¥4,052 million (up 6.3% year on year) but a substantial decline in operating income to ¥50 million (down 70.2%).

Key Products

Growth Drivers

• Increase in the number of actively transacting salons (14,609, up 1,943 from the prior period) driven by expanded promotions to acquire new salons
• Expectations for sales recovery from the launch of new products (one hair care line and two skin care lines) in FY2027 (ending March 2027)
• Promotion of enhanced counseling skills, improved purchasing experience, and customer repeat-visit development centered on digital initiatives (Medium-Term Management Plan 2025-2027 NEXT)
• Boost to ordinary income from increased interest and dividend income received (total non-operating income for the period of ¥30 million, up approximately ¥15 million year on year)
• Gradual progress in geographic diversification through increased overseas sales (¥158 million, up 6.2% year on year)
• Deepening transactions with existing salons through revitalized in-store sales activities, reduced lost repeat-purchase opportunities, and improved cross-selling

Risks

• For FY2027 (ending March 2027), operating income is expected to decline sharply by 70.2% year on year to ¥50 million due to increased new product promotion expenses, personnel costs, and IT-related expenses, creating high uncertainty regarding investment returns
• Continued decline in sales of existing skin care products (¥1,353 million in the current period, down 11.2% year on year), with supplementation through new products remaining a challenge
• Domestic sales account for 95.8% of total sales, exposing the company to medium- to long-term contraction risk in the domestic beauty market due to population decline and aging/declining birthrate
• Adverse impact on personal consumption and rising salon operating costs due to soaring raw material and energy prices and general price increases
• Concerns over economic downside risk and volatility in financial and capital markets stemming from U.S. trade policy and geopolitical risks
• Overseas sales composition remains limited at 4.2% (¥158 million), constraining geographic diversification
• Cash flow from operating activities decreased substantially to ¥132 million (from ¥307 million in the prior period), with corporate tax payments of ¥136 million weighing on cash flow