Unicharm Cuts FY26 Core Profit Forecast 17% on Middle East Cost Pressure Despite 14% H1 Gain

A strong half, a weaker year

Unicharm Corporation (TSE: 8113) published consolidated first-half results for FY12/2026 on August 5, 2026, covering January 1 to June 30, 2026 under IFRS. Revenue rose 4.9% to ¥487,133 million and core operating profit — which the company defines as gross profit less selling, general and administrative expenses, and uses to gauge recurring performance — climbed 14.1% to ¥65,032 million. Profit before tax rose 6.6% to ¥66,608 million and interim profit 4.6% to ¥48,829 million.

The line attributable to owners of the parent went the other way, slipping 1.9% to ¥41,031 million, and earnings per share edged down to ¥23.75 from ¥23.84. Comprehensive income, by contrast, more than quadrupled to ¥61,541 million from ¥14,170 million — a swing driven by translation and valuation items rather than trading.

Pet Care outgrows the core

Personal Care, which supplies 81% of revenue, grew 4.0% to ¥396,815 million with core operating profit up 10.7% to ¥48,039 million. Pet Care grew faster on both lines: revenue up 9.6% to ¥82,870 million and core operating profit up 21.6% to ¥15,723 million. The residual Other segment added 7.7% of revenue at ¥7,448 million and lifted core operating profit 78.1% to ¥1,270 million. Nutrire Industria de Alimentos Ltda. was newly consolidated during the half.

The guidance cut

Against that first half, the revision to the full-year outlook is stark. Compared with the forecast issued on May 8, 2026, revenue was raised ¥5,000 million to ¥1,015,000 million, but core operating profit was cut ¥23,000 million, or 16.9%, to ¥113,000 million, profit before tax ¥22,300 million or 16.4% to ¥113,500 million, and net profit attributable to owners of the parent ¥16,500 million or 19.1% to ¥70,000 million. Forecast earnings per share fell to ¥40.68 from ¥50.26.

Management attributed the reduction to expected increases in raw-material prices and logistics costs stemming from heightened tension in the Middle East, and said it had also revised its assumed exchange rates to reflect prevailing levels. To absorb the cost increase it plans to launch new and renewed products that pass value through to price, and to push productivity improvements group-wide, with the stated aim of building a higher-margin structure for the following year.

Even after the cut, the revised guidance still sits above FY12/2025 actuals: revenue would rise 7.4% from ¥945,268 million, core operating profit 3.8% from ¥108,884 million and net profit 7.3% from ¥65,212 million. Total assets edged up 0.7% to ¥1,231,452 million, equity attributable to owners of the parent 2.1% to ¥811,594 million, and the parent-equity ratio improved to 65.9% from 65.0%. The annual dividend forecast is ¥22.00 per share against ¥18.00 for FY12/2025.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.