Japan Household & Personal Care and Food Manufacturers: April-June 2026 results preview: Substantial guidance hikes unlikely

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Japan Household & Personal Care and Food Manufacturers: April-June 2026 results preview: Substantial guidance hikes unlikely

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13 Jul 2026 07:43:55 ET │ 12 pages

Japan Household & Personal Care and

Food Manufacturers

April-June 2026 results preview: Substantial guidance hikes unlikely

Hiroki Watanabe AC

CITI'S TAKE +81-3-6776-8296

hiroki.watanabe@citi.com

We gather our thoughts on sector earnings ahead of the Q2 results season

that begins in late July. Declining oil prices suggest the cost hit from Middle

East tensions could be more moderate than levels forecast by sector

companies when announcing Q1 results. Nevertheless, we think overall

costs including packaging materials, logistics, and labor are set to continue

rising YoY. Therefore, price revision commentary by sector firms will remain

a focus, as will concerns about sales volume declines accompanying price

revisions. Kao remains our top pick given its strong brand power and pricing

control.

Preference order— Previously avoided due to high oil prices, in the toiletries industry,

Kao remains our top pick. While cost-push inflation will likely continue, Kao's track

record of achieving both price revisions and sales volume growth in such an

environment deserves high evaluation. Additionally, we also like Ajinomoto

(expecting double-digit OP growth backed by +30% YoY revenue growth in

functional materials), Coca-Cola Bottlers Japan (strong commitment to profitability

improvement, sales volume growth), and Lifedrink (over +20% YoY revenue and

profit growth).

Guidance revisions —We expect upward revisions from Kirin HD (cost savings from

discontinued pharmaceutical development) and Kao (reflecting unplanned land sale

gains booked in Q1). We doubt the hikes, which look set to be one-off- rather than