I-ne CO., LTD. 2Q Earnings Flash
All three categories — Hair Care, Beauty Appliances, and Skincare & Other — posted double-digit growth, and full-year guidance was raised. Focus now shifts to second-half strategic investment and the response to rising input costs.
Key Positives From The 2Q Results
Revenue came in at JPY 26,808M (+20.1% YoY) with operating income of JPY 2,012M (+19.2% YoY), delivering both top- and bottom-line growth. Skincare & Other grew +52.3% on the ramp-up of the health food brand portfolio, leading company-wide growth. The COGS ratio improved on the clearance of slow-moving inventory and reduced intermediary margins in beauty appliances, and the combination of revenue growth and cost improvement absorbed the step-up in advertising and promotion spend.
- Gross profit margin improved to 61.3% (+3.7pt YoY). On the company's presentation basis, the adjusted COGS ratio also improved 3.7pt to 38.5%
- Skincare & Other reached JPY 6,608M (+52.3% YoY). The three health food brands launched in 2025 contributed roughly JPY 2.3B in aggregate
- Beauty Appliances posted JPY 3,595M in 2Q standalone (+31.8% YoY), a quarterly record. New products such as the Face Current Pointer contributed
- Personnel cost ratio of 7.1% (-1.6pt YoY), reflecting AI-driven process efficiency gains and optimized headcount allocation
- Full-year guidance raised from the initial plan: revenue +JPY 3B, EBITDA and operating income each +JPY 500M
Key Concerns From The 2Q Results
Against first-half operating income of JPY 2,012M, full-year guidance stands at JPY 0–1,500M, implying a second-half operating result of -JPY 2,012M to -JPY 512M. Management plans to continue large-scale strategic investment in the second half, and also expects roughly JPY 500–600M of cost inflation tied to the Strait of Hormuz, plus around JPY 300M of additional yen-depreciation-driven cost pressure versus the initial plan.
- Even assuming the top end of the JPY 1,500M full-year operating income range, second-half operating income would be -JPY 512M (our estimate)
- Advertising and promotion cost ratio of 22.3% (+5.4pt YoY). Roughly JPY 1.4B of incremental spend was deployed in the first half, and the return on that investment needs to be verified
- Extraordinary losses of JPY 283M booked, comprising JPY 219M in special investigation costs and related items, JPY 33M in listing agreement penalty fees, and JPY 6M in surcharges
- Entered a grace period for re-examination due to a breach of its written oath, effective 18 June 2026 (through 18 June 2027)
- Overseas operations remain loss-making with an operating loss of -JPY 25M, and account for just 3.7% of company-wide revenue (our estimate)
Focus Areas / Items To Monitor Going Forward
- The composition of the second-half operating income outlook — specifically how much each of Strait of Hormuz/FX-driven cost inflation and large-scale strategic investment weighs on earnings
- The return on the increase in the advertising and promotion ratio to 22.3%. Quarterly sales trajectories for the new brands UNIPLEX and Amprem, and for the three health food brands
- The effectiveness of the global expansion strategy
- A breakdown of the second-half cost items that explain the gap between first-half operating income of JPY 2,012M and the JPY 1,500M top end of full-year guidance
- The second-half deployment amount for large-scale strategic investment, its allocation by category, and the KPIs set for investment payback
- The assumptions behind the roughly JPY 500–600M Strait of Hormuz impact (affected SKUs, sourcing routes) and the policy on price pass-through
- Quantification of the profitability improvement in beauty appliances from making Artemis a wholly owned subsidiary (acquisition cost JPY 2,910M)
- Progress toward completing the design of recurrence-prevention measures in 3Q and beginning operation in 4Q, and the outlook for exiting the grace period
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 26,808M | +20.1% |
| Gross Profit | JPY 16,443M | +27.8% |
| └ Gross Profit Margin | 61.3% | +3.7pt |
| SG&A | JPY 14,430M | +29.1% |
| EBITDA | JPY 2,891M | +13.5% |
| Operating Income | JPY 2,012M | +19.2% |
| └ Operating Income Margin | 7.5% | -0.1pt |
| Recurring Profit | JPY 1,911M | +20.4% |
| Extraordinary Losses | JPY 283M | - |
| Interim Net Income before tax | JPY 1,633M | +2.9% |
| Interim Net Income Attributable to Owners of Parent Company | JPY 1,047M | +13.5% |
| EPS | JPY 58.92 | +11.6% |
| Cash Flow from Operating Activities | JPY 2,586M | +1.0% |
Operating income rose +19.2% while pre-tax interim net income grew only +2.9%, due to JPY 283M of extraordinary losses (JPY 0M in the prior-year period). The breakdown is JPY 219M in special investigation costs and related items, JPY 33M in listing agreement penalty fees, JPY 24M in subsidiary liquidation losses, and JPY 6M in surcharges. EBITDA (as disclosed by the company: operating income + depreciation + goodwill amortization) includes JPY 553M of depreciation and JPY 325M of goodwill amortization.
Performance By Business Segment
All three categories used in the company's IR communications posted double-digit growth. Hair Care was driven by BOTANIST's US Costco rollout and expanded YOLU variants; Beauty Appliances by the new product wave launched from 4Q 2025; and Skincare & Other by the health food brand portfolio. On a reporting segment basis, Domestic revenue was JPY 25,818M (+18.7% YoY) with segment profit of JPY 3,769M (+16.5% YoY), while Overseas revenue was JPY 989M (+74.6% YoY) with an operating loss of -JPY 25M (versus -JPY 51M in the prior-year period).
Revenue By Category (IR Disclosure Basis)
| Category | Revenue | YoY | Mix |
|---|---|---|---|
| Hair Care | JPY 14,215M | +12.2% | 53.0% |
| Beauty Appliances | JPY 5,982M | +12.8% | 22.3% |
| Skincare & Other | JPY 6,608M | +52.3% | 24.6% |
(Mix figures are our estimates. Profit by category is not disclosed.)
Segment Performance Table (Reporting Segments / Revenue To External Customers)
| Segment | Revenue | YoY | Segment Profit | YoY | Margin |
|---|---|---|---|---|---|
| Domestic | JPY 25,818M | +18.7% | JPY 3,769M | +16.5% | 14.6% |
| Overseas | JPY 989M | +74.6% | -JPY 25M | - | - |
| Adjustments (Corporate Costs) | - | - | -JPY 1,731M | - | - |
| Total | JPY 26,808M | +20.1% | JPY 2,012M | +19.2% | 7.5% |
- Skincare & Other: +52.3%. The three health food brands launched in 2025 — Teaflex, Befas, and Collatein — contributed roughly JPY 2.3B combined, with Befas posting sequential revenue growth every quarter since launch
- Beauty Appliances: 2Q standalone revenue of JPY 3,595M (+31.8% YoY), a quarterly record. Cordless straighteners and the Metal Gua Sha Comb grew on inbound demand, viral traction overseas, and new points of sale
- BOTANIST: +20.9% in the first half. Alongside offline expansion at US Costco, the relaunched body soap foam grew +105.0%, lifting the overall body care business +19.8%
- YOLU: +13.1% in the first half. The fourth variant, Mellow Night Repair, contributed, and cumulative series unit sales surpassed 100 million
- WrinkFade: +24.1%, driven by new subscription customer acquisition and sales growth on EC marketplaces
- Overseas: revenue grew +74.6% but the segment remained loss-making at -JPY 25M. Revenue growth has yet to translate into profitability, and monetization remains the key challenge
- Global sales: 2Q standalone revenue of JPY 399M, down 32.4% from JPY 590M in 1Q (our estimate). While first-half cumulative growth was +74.6% YoY, the quarterly trend decelerated, and we want to monitor the trajectory from 3Q
- BOTANIST (2Q standalone): JPY 3,196M, -3.6% YoY (our estimate). Following strong 1Q growth, 2Q declined year on year, and we want to confirm whether the +20.9% first-half growth, including the Costco rollout, is sustained from 3Q
Progress Versus Full-Year Guidance
First-half revenue represents 47.0–48.7% of the full-year guidance range, ahead of the 45.6% first-half share of full-year actuals in the prior year (our estimate). Operating income and EBITDA, however, are already near or above the top end of full-year guidance at the half-year mark, and management has explicitly built in second-half large-scale strategic investment and cost inflation (roughly JPY 500–600M from the Strait of Hormuz, plus around JPY 300M versus the initial plan from FX).
| Item | Value (Cumulative Interim) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 26,808M | JPY 55,000–57,000M | 47.0–48.7% |
| EBITDA | JPY 2,891M | JPY 1,700–3,200M | 90.3–170.1% |
| Operating Income | JPY 2,012M | JPY 0–1,500M | 134.1% (vs. upper end) |
(Progress rates are our estimates. Progress versus the lower end of operating income guidance cannot be calculated. Full-year guidance is disclosed for three metrics only: revenue, EBITDA, and operating income.)
- The first half accounted for 45.6% of full-year revenue in FY12/2025 and 45.1% in FY12/2024 (our estimates), indicating a second-half-weighted revenue profile
- Management plans to concentrate strategic investment and cost inflation impacts in the second half, so profits are expected to be first-half weighted
Changes To Guidance
Full-year consolidated guidance announced on 15 May 2026 was revised upward. Reflecting double-digit YoY growth across all categories in the first half, the company raised all three disclosed metrics: revenue, EBITDA, and operating income. Guidance continues to be presented as a range, citing geopolitical risk and FX uncertainty.
- Revenue: from JPY 52,000–54,000M to JPY 55,000–57,000M (+JPY 3,000M)
- EBITDA: from JPY 1,200–2,700M to JPY 1,700–3,200M (+JPY 500M)
- Operating Income: from -JPY 500M–1,000M to JPY 0–1,500M (+JPY 500M)
- Rationale: double-digit revenue growth was achieved across all categories in the first half, while the second half assumes roughly JPY 500–600M of cost inflation from the Strait of Hormuz, around JPY 300M of additional FX-driven cost pressure versus the initial plan, and continued large-scale strategic investment
Commentary On Shareholder Returns
The full-year dividend forecast of JPY 15.00 is unchanged, but the payment frequency has been split from once to twice a year. An interim dividend of JPY 7.00 (total JPY 124M, record date 30 June 2026, payment starting 10 September 2026) was resolved at an extraordinary board meeting on 7 August 2026, with a year-end dividend of JPY 8.00 planned. The shareholder benefit program has also been split into two distributions per year from 2026, offering a digital gift worth JPY 5,000 per distribution for holders of 100–499 shares and JPY 10,000 for holders of 500 shares or more. On buybacks, the company intends to act opportunistically based on the share price level and free-float market capitalization (the most recent buyback was approximately JPY 500M in May 2024).
Financial Position
The company maintains a net cash position, and the equity ratio rose to 53.1%. Total assets and net assets both contracted following the elimination of non-controlling interests from making Artemis a wholly owned subsidiary and scheduled long-term debt repayments, but operating cash flow of JPY 2,586M kept the financial base stable.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 6,896M | -19.2% vs. prior year-end |
| Shareholders' Equity | JPY 17,739M | -3.8% vs. prior year-end |
| Interest-Bearing Debt | JPY 5,999M | -9.7% vs. prior year-end |
| └ Current Portion of Long-Term Debt | JPY 1,285M | - |
| └ Long-Term Debt | JPY 4,714M | -JPY 642M vs. prior year-end |
| Inventories (Merchandise + Raw Materials and Supplies) | JPY 5,035M | -6.2% vs. prior year-end; progress on clearing slow-moving inventory |
| Goodwill | JPY 5,428M | -5.7% vs. prior year-end; first-half amortization of JPY 325M |
| Total Intangible Assets | JPY 11,368M | 34.0% of total assets |
| Non-Controlling Interests | JPY 0M | Eliminated upon Artemis becoming a wholly owned subsidiary |
| EBITDA | JPY 2,891M | Company disclosure (operating income + depreciation + goodwill amortization) |
News Released Alongside The Earnings Announcement
- 2026/08/05SALONIA added a new pink colorway to its pen-type beauty device "Face Current Pointer," rolling out from 21 August. The product has achieved 401% of plan in roughly four months since launch ＜Pen-Type Beauty Device＞New Pink Colorway Launching 21 August on Strong Demand!
- 2026/08/05BOTANIST will launch "Botanical Body Soap Foam Mild Care," a quasi-drug with 3x foam volume, on 1 September, strengthening its growing body care franchise BOTANIST Launches "Botanical Body Soap Foam Mild Care" with 3x Foam per Pump on 1 September
- 2026/08/04YOLU will launch a "Three-Fragrance Assortment Set" of bath tablets on 2 September, targeting gift demand Popular Bath Tablets Launch "Three-Fragrance Assortment Set," Ideal for Gifting, on 2 September
Major Announcements During The Quarter
- 2026/05/15YOLU surpassed 100 million cumulative units sold roughly four and a half years after launch, scaling up as a flagship brand in the night care market YOLU Surpasses 100 Million Cumulative Units Sold
- 2026/06/01Launched "UNIPLEX," a new hair care brand focused on texture improvement, on 16 June. Distributed through EC, Loft, Tsuruha, Welcia, and AEON, the brand took 15 No.1 rankings on EC platforms within one month of launch For "Coarse, Thick, and Damaged Hair" Concerns: Texture-Improving Hair Care "UNIPLEX" Launches 16 June
- 2026/06/19Received notice from the Tokyo Stock Exchange of entry into a grace period for re-examination due to a breach of its written oath (through 18 June 2027) and the imposition of a listing agreement penalty fee Notice Regarding Entry Into a Grace Period for Re-Examination Due to Breach of Written Oath and Imposition of Listing Agreement Penalty Fee
- 2026/07/17In-house research institute JBIST established a "cuticle barrier film penetration technology" using ionic liquid technology, to be deployed as a differentiating technology across hair care products In-House Research Institute JBIST Establishes "Cuticle Barrier Film Penetration Technology" Using Ionic Liquid Technology
- 2026/07/23Will launch new hair care brand "Amprem" on 28 August. Following an EC-first launch, distribution will expand progressively to Loft, PLAZA, and drugstores nationwide New Hair Care Brand "Amprem" Debuts Friday, 28 August
Large-Shareholding Filings / Material Proposals Over The Past Year
- Yohei Onishi (joint holder: COH): 60.13% → 59.67% (2025/09/03) — Purpose is management stabilization in his capacity as Representative Director; COH is an asset management vehicle holding for stable, long-term ownership
- Yohei Onishi (joint holder: COH): 59.67% → 58.59% (2025/09/17) — Same as above
- Yohei Onishi (joint holder: COH): 58.59% → 57.02% (2025/09/24) — Same as above
- Sparx Asset Management: 6.15% → 4.68% (2025/11/19) — Pure investment under discretionary investment and investment trust management agreements; fell below 5%
- Resona Asset Management: 6.64% → 4.93% (2025/11/20) — Held for investment management purposes under investment trust and discretionary investment agreements; fell below 5%
- Yohei Onishi (joint holder: COH): 57.02% → 56.97% (2026/01/06) — Change due to a share lending agreement; holding purpose is management stabilization and long-term ownership
- Yohei Onishi (joint holder: COH): 56.97% → 56.96% (2026/07/21) — Same as above
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