Cosmetics Division-Sales Growth and Operating Profit Analysis

Operating profit reached 17.3 billion yen (approximately RMB 818 million), up by 8.6% year-on-year, driven by higher sales and controlled selling expenses that offset the increase in cost of sales.

However, this figure was slightly below the growth plan, as the decline in Tarte's earnings offset the higher-than-planned profits from Kose Sales Co., ALBION, and Kose Cosmeport in Japan.

The cosmetics division, which is the main source of performance, saw its sales rise by 6.2% to 255.349 billion yen (approximately RMB 12.07 billion). However, its operating profit fell by 15.8% to 15.052 billion yen (approximately RMB 711 million).

The sales growth in this division was driven by higher sales in the ultra-high added-value and high-end categories, while the decline in operating profit was mainly due to an increase in the sales cost ratio.