Rohto Q1 Sales Jump 12% to ¥91.6 Billion and Guidance Rises, but a One-Off Dividend Base Effect Cuts Net Profit 9.5%

ROHTO Pharmaceutical Co., Ltd. (TSE: 4527), the Osaka consumer-health group behind the Hada Labo skincare line, the Rohto and Rohto V eye-drop franchises and the Obagi and Acnes brands, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under Japanese accounting standards. Net sales rose 11.8% to ¥91,624 million and operating profit 16.8% to ¥13,663 million, while ordinary profit fell 10.1% to ¥14,491 million and net profit attributable to owners of the parent 9.5% to ¥10,650 million. Basic earnings per share came to ¥47.14 against ¥52.09 a year earlier, with diluted EPS of ¥46.50. The quarterly figures have not been reviewed by an accounting auditor.

Operating profit outgrows sales, but the profit line below it is flattered by nothing

The two halves of the income statement point in opposite directions, and the reason sits entirely below the operating line. Operating profit grew 16.8%, faster than the 11.8% sales gain, even though Rohto spent more on advertising, sales promotion and personnel during the quarter — the operating margin widened to 14.9% from 14.3%. Ordinary profit and net profit nonetheless fell, because the first quarter of the previous year contained a one-off dividend income item that did not recur. That base effect alone explains the gap: ordinary profit of ¥14,491 million is down 10.1% against a year-earlier ¥16,127 million that had itself jumped 31.4%, and net profit of ¥10,650 million is down 9.5% against ¥11,769 million that had risen 38.7%. Comprehensive income, which captures currency translation, tells the more flattering version of the same quarter — up 79.3% to ¥13,929 million from ¥7,769 million. For investors the operative reading is that nothing deteriorated in the operating business; a non-operating item simply stopped repeating.

Japan: Hada Labo and eye care grow 5.2% as spending slips into later quarters

The domestic segment produced external sales of ¥42,864 million, up 5.2%, and segment profit of ¥6,867 million, up 8.8%. Growth was led by the Hada Labo skincare range, by eye drops aimed at younger consumers, by Rohto V5 and by the Obagi skincare brand, with group companies Rohto Nitten Co., Qualitech Pharma Co. and Amato Pharmaceutical Products all contributing to the sales gain. Segment profit outpaced sales in part for a timing reason investors should discount: part of the planned advertising and research-and-development spend slipped into later quarters rather than being cut. Japan now accounts for 46.8% of external sales, a share that has narrowed as the overseas business compounds. The market backdrop was mixed — Japan's economy recovered moderately as employment and income conditions improved, but higher food and energy prices eroded real household purchasing power and weighed on consumer spending, and inbound visitor numbers fell below the prior year even as a persistently weak yen kept inbound demand firm.

Overseas: Asia surges 19.7% and Europe's segment profit rises nearly fivefold

Overseas is now 53.2% of external sales, and it is where the quarter's momentum sits. Asia delivered external sales of ¥35,604 million, up 19.7%, with segment profit of ¥5,676 million, up 18.8% — Southeast Asia was the engine, with Vietnam, Malaysia and Myanmar all strong, alongside solid contributions from Eu Yan Sang International and from China. By product, eye drops, Hada Labo and Acnes led the growth. Asia alone is now 38.9% of group external sales, only a step behind Japan. Europe was the standout on profitability: external sales rose 19.9% to ¥6,684 million while segment profit jumped 392.7% to ¥664 million, close to a fivefold increase. Poland's Dax Cosmetics performed strongly with Hadalabo Tokyo and YOSKINE, and in the United Kingdom sales of an anti-inflammatory analgesic recovered after a container supplier's bankruptcy had temporarily cut output in the previous fiscal year — with production normalised, the cost ratio improved as well. The Americas grew more modestly, with external sales of ¥5,465 million, up 8.3%, and segment profit of ¥226 million, up 22.6%, on solid United States performance and the continued strength of Hada Labo in Brazil, despite higher selling, general and administrative expenses.

A stronger balance sheet, and a new corporate direction built on cell science

Total assets stood at ¥487,151 million at June 30, 2026, up ¥1,380 million from the March year-end, as investment securities added ¥2,739 million, raw materials and supplies ¥1,885 million and the net defined benefit asset ¥1,628 million, offset by a ¥4,123 million decline in electronically recorded receivables. Total liabilities fell ¥6,904 million to ¥158,692 million, with other current liabilities down ¥4,488 million, short-term borrowings down ¥2,596 million and income taxes payable down ¥2,141 million, partly offset by a ¥2,421 million rise in notes and accounts payable. Net assets rose ¥8,284 million to ¥328,459 million on retained earnings of ¥5,001 million and a ¥2,435 million foreign-currency translation adjustment; shareholders' equity climbed to ¥309,106 million from ¥301,446 million and the equity ratio to 63.5% from 62.1%. Cash and deposits eased to ¥84,771 million from ¥86,816 million. Strategically, Rohto announced in May 2026 a new corporate direction, "Connect for Well-being & Longevity", declaring its evolution into a company that promotes and delivers longevity by connecting its knowledge across pharmaceuticals, skincare, food and regenerative medicine on the foundation of the cell science it has built since its founding.

Guidance raised on every line, and the dividend rises to ¥50

On the same day, Rohto revised its full-year FY3/2027 forecast upward from the version issued on May 13, 2026, and issued a separate notice of the revision. Net sales guidance rises from ¥369,500 million to ¥372,300 million (+¥2,800 million, +0.8%; +8.3% against FY3/2026), operating profit from ¥43,800 million to ¥45,000 million (+¥1,200 million, +2.7%; +9.4% year on year), ordinary profit from ¥46,100 million to ¥47,400 million (+¥1,300 million, +2.8%, still −1.2% against a prior year inflated by the same one-off) and net profit attributable to owners from ¥34,500 million to ¥35,200 million (+¥700 million, +2.0%; +2.8% year on year). Forecast EPS rises from ¥152.68 to ¥155.78. Management attributes the revision to two things: foreign-exchange assumptions moved from ¥155 to ¥158 per US dollar and from ¥22 to ¥23 per Chinese yuan, and better-than-expected performance in the Asia, Japan and Europe segments during the first quarter. Every line of the revised forecast exceeds the previous one. First-quarter operating profit of ¥13,663 million already represents 30.4% of the raised ¥45,000 million full-year target. The dividend forecast is unchanged at ¥50.00 for the year — ¥25.00 at the interim and ¥25.00 at the year-end — against ¥46.00 paid in FY3/2026 (¥21.00 plus ¥25.00), an increase of 8.7%. Shares issued were unchanged at 236,178,310 including 10,214,018 treasury shares, with 225,964,292 shares averaged over the quarter.

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