Beauty Sales:

$2 billion

Key Personnel:

• Kazutoshi Kobayashi, president and CEO
• Takao Kobayashi, senior executive director
• Masanori Kobayashi, executive director
• Koichi Shibusawa, executive director
• Yusuke Kobayashi, director
• Shinichi Mochizuki, director
• Masahiro Horita, director
• Yukino Kikuma, director (external)
• Norika Yuasa, director (external)
• Yuko Maeda, director (external)
• Yasukiyo Kobayashi, honorary chairman

Major Products:

High Prestige—Decorté, JillStuart, Sekkisei Myabi, Infinity, Predia, Addiction, Awake, tarte, iMPREA

Prestige—Sekkisei, One by Kosé, Lechéri, Esprique, Astaluxe, X-Barrier, Acneo, Maihada, Carté HD

Cosmetaries—Visée, Fasio, Nailholic, Make Keep Mist, Stephen Knoll New York, softymo, Je l’aime, Bioliss, Clear Turn, Suncut, Magnifique, Grace One.

New Products:

RECiPIO skincare, Liposome Advanced Repair Serum, Magnifique genderless makeup, CoenRich Medica Rich Medicated Hand Milk, Rouge Decorté, Esprique Syncrofit Pact UV, Esprique Comfort Makeup Cream.

Financial Summary:

In the nine-month transitional fiscal year that ended December 2021, net sales increased 4.8% to $2 billion as difficulties created by the pandemic slowly declined and there were signs of an economic recovery.

In the Japanese cosmetics market, sales recovered slowly late in 2021 despite the declining interest in buying cosmetics among Japanese consumers because of the need to limit outings during the pandemic. In China, sales of cosmetics were negatively affected by restrictions on travel and outings due to the pandemic. However, cosmetics sales in China were generally higher, primarily in the e-commerce and travel retail categories. In other Asian countries, the decline in cosmetics sales ended even though market conditions remain challenging because of the pandemic. In the U.S., Kosé says cosmetics sales are recovering steadily despite disruptions in some supply chains.

Sales of Decorté products in the high-prestige brand category remained strong in China and Japan, and there were higher sales in Japan of Albion, the Addiction line of makeup products and Jill Stuart cosmetics. Kao-owned tarte products also performed well in North America and Europe but sales of other major brands were sluggish.

Sales of Stephen Knoll New York hair care products and the Suncut, softymo and Clear Turn brands of Kosé Cosmeport Corp. increased. Sales of hair care brands recovered because of limited-time-only promotions and other activities. However, sales of makeup brands were lackluster throughout the year despite a recovery beginning in October. As a result, sales in the cosmetaries business decreased 5.8% to $298.4 million.

2021/2022 Highlights:

Kosé partially revised its medium-to-long-term VISION 2026 (its overarching sustainability plan) in 2021.

“We have left the numerical targets for VISION 2026 unchanged, since there seems little to be gained by making revisions while the business environment remains unclear. Our aim in pursing VISION 2026 is to evolve into a company with a global presence, and our vision is to become ‘a company with ultimately high loyalty,’” explains Kosé president and CEO Kazutoshi Kobayashi. “We will continue creating sustainable and adaptable products and services by taking a global perspective, contributing to a brighter society by making people happy through the power of a cosmetics culture and beauty. In working to achieve this vision, I believe we will win the support of all stakeholders, enabling us to evolve into a company with a global presence.”

In October 2021, Kosé and Kao embarked on a comprehensive collaboration in the cosmetics sustainability domain, with the aim of realizing a sustainable society. Both parties will pool their strengths to collaborate in a wide range of fields, including people, society, and the environment, to identify solutions in the cosmetics business that can contribute to the realization of a sustainable society. In February 2022, they started a collaboration between Kao’s Horizontal Recycling of Cosmetic Plastic Bottles and Kosé’s cooperative venture, Recycling Cosmetics into Paints Initiative. Going forward, both companies that have been respectively promoting these initiatives will work together to promote and develop them while making use of each other’s knowledge.

In December 2021, Kosé was placed on CDP’s climate change A list for the second consecutive year. CDP is an international nonprofit organization that conducts a survey on actions to address climate change to evaluate climate change-related initiatives and information disclosure. Only the companies scoring the highest are included in the A List.

During the first half of 2022, Kosé continued to make progress with activities based on the VISION 2026 medium to long-term vision. In 2022, these activities advanced to Phase II: Increase Kosé’s global presence and improve the customer experience.

Looking Ahead:

In the first half of 2022, sales and earnings were higher than one year earlier despite the significant negative impact of lockdowns in China. Performance was supported by strong sales of high-prestige products in Japan at cosmetics stores and department stores and the growth of sales at Tarte Inc., which sells products in the U.S. First half sales increased 4.4% to $957.6 million.

Although the outlook for the Japanese economy is uncertain, the economy is expected to recover slowly. In China, consumer spending is expected to be sluggish because of the country’s zero-COVID policy. In the United States, there are concerns about monetary tightening and inflation that could continue for a long time. Despite these issues, the Chinese and U.S. economies are expected to continue to recover. Based on this outlook, Kosé forecasts net sales of 2.5 billion in fiscal year 2022.