POLA ORBIS HOLDINGS (4927): FY2025 Results Summary — Flat Sales but Operating Income Up 13.6% on ORBIS Growth and Cost Control

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

POLA ORBIS HOLDINGS INC. reported consolidated net sales of 170,285 mil. yen for fiscal 2025 (the year ended December 2025), down 74 mil. yen or 0.0% year on year, essentially on par with the previous year. Operating income rose 13.6% to 15,693 mil. yen, as revenue growth at ORBIS and improved losses at Jurlique more than offset a revenue decline at POLA, and SG&A expenses were reduced by 2,132 mil. yen. Profit attributable to owners of parent was 9,472 mil. yen, up 2.0%, with the operating gain largely absorbed by higher extraordinary losses related to the liquidation of Orbis Beijing and structural reform expenses for Jurlique. Against the company plan, net sales came in 2.1% short while operating income exceeded the plan by 8.2%.

Consolidated Results (Full-Year Actual)

Net sales were flat year on year: POLA posted a revenue decline while ORBIS grew. The cost of sales ratio edged up from 18.7% in FY2024 to 18.8% in FY2025, so gross profit slipped 249 mil. yen (down 0.2%). SG&A expenses fell 2,132 mil. yen (down 1.7%), with sales commissions down 1,558 mil. yen and administrative expenses, etc. down 1,373 mil. yen, against labor expenses up 330 mil. yen and sales related expenses up 469 mil. yen. As a result, the operating margin improved from 8.1% in FY2024 to 9.2% in FY2025.

Item (mil. yen)	FY2025	FY2024	YoY Change (Amount)	YoY Change (%)
Net sales	170,285	170,359	(74)	(0.0%)
Cost of sales	32,021	31,846	174	0.5%
Gross profit	138,264	138,513	(249)	(0.2%)
SG&A expenses	122,570	124,702	(2,132)	(1.7%)
Operating income	15,693	13,810	1,882	13.6%
Non-operating income	1,698	2,529	(831)	(32.9%)
Non-operating expenses	370	257	113	44.0%
Ordinary income	17,022	16,083	938	5.8%
Extraordinary losses	3,726	1,434	2,291	159.8%
Profit before income taxes	13,296	14,649	(1,352)	(9.2%)
Income taxes etc.	3,823	5,341	(1,517)	(28.4%)
Profit attributable to owners of parent	9,472	9,286	186	2.0%

Below the operating line, foreign exchange gains of 962 mil. yen were posted in FY2025 against 1,749 mil. yen in FY2024. Extraordinary losses included a 1,106 mil. yen loss due to the liquidation of Orbis Beijing and 802 mil. yen in structural reform expenses for Jurlique, while income taxes, etc. decreased by 1,600 mil. yen due to the same liquidation. Average exchange rates for the year were 1.00 AUD = 96.49 JPY and 1.00 CNY = 20.81 JPY.

Versus the full-year plan, net sales were 3,714 mil. yen (2.1%) below the 174,000 mil. yen plan, mainly on a shortfall of approximately 4,000 mil. yen in the beauty care business (POLA down approx. 2,400 mil. yen, Jurlique down approx. 1,200 mil. yen, THREE down approx. 900 mil. yen, ORBIS up approx. 600 mil. yen). Operating income beat the 14,500 mil. yen plan by 1,193 mil. yen (8.2%), ordinary income beat the 14,700 mil. yen plan by 2,322 mil. yen (15.8%), and profit attributable to owners of parent beat the 8,500 mil. yen plan by 972 mil. yen (11.4%).

Segment Results

In the beauty care segment, net sales decreased year on year, mainly due to a decrease in POLA’s revenue, but operating income increased, driven by higher income at ORBIS and improved losses at Jurlique. In the real estate segment, revenue and income increased because the POLA aoyama building opened in March 2024. Beauty care accounted for 96% of FY2025 consolidated net sales, real estate 2%, and others (building maintenance business) 2%.

Segment	Metric (mil. yen)	FY2025	FY2024	YoY Change (Amount)	YoY Change (%)
Consolidated	Net sales	170,285	170,359	(74)	(0.0%)
Beauty care	Net sales	164,148	165,060	(911)	(0.6%)
Real estate	Net sales	3,023	2,214	809	36.6%
Others	Net sales	3,112	3,085	27	0.9%
Consolidated	Operating income	15,693	13,810	1,882	13.6%
Beauty care	Operating income	15,856	14,926	929	6.2%
Real estate	Operating income	421	76	344	447.4%
Others	Operating income	218	231	(13)	(5.8%)
Reconciliations	Operating income	(801)	(1,424)	622	–

Beauty Care: Results by Brand

POLA net sales were 90,373 mil. yen (down 2.6%) and operating income 8,687 mil. yen (down 12.5%). Domestic sales fell 1.7%, with consignment sales down 5.4% while department store sales rose 1.5%, e-commerce rose 6.4% and hotel amenities rose 23.0%; overseas sales fell 7.9%. In the domestic business, purchase per customer was up 4.6% while the number of customers was down 7.8%. Domestic stores numbered 2,481 (down 37 versus December 2024) and overseas stores 126 (down 21). ORBIS net sales rose 4.3% to 50,239 mil. yen and operating income rose 12.0% to 9,304 mil. yen, with domestic sales up 5.6% (direct selling up 1.6%, external channels etc. up 26.1%) and overseas sales down 39.5%. Jurlique net sales were 8,386 mil. yen (down 4.3%), with the operating loss narrowing by 1,031 mil. yen to 1,430 mil. yen. Within brands under development, DECENCIA net sales were 5,592 mil. yen (down 0.0%) with operating income of 553 mil. yen (up 13.5%), and THREE net sales were 4,862 mil. yen (down 11.5%) with an operating loss of 1,194 mil. yen.

Brand	Metric (mil. yen)	FY2025	FY2024	YoY Change
Beauty care total	Net sales	164,148	165,060	(0.6%)
POLA	Net sales	90,373	92,798	(2.6%)
ORBIS	Net sales	50,239	48,190	4.3%
Jurlique	Net sales	8,386	8,763	(4.3%)
Brands under development	Net sales	15,149	15,307	(1.0%)
Beauty care total	Operating income	15,856	14,926	6.2%
POLA	Operating income	8,687	9,933	(12.5%)
ORBIS	Operating income	9,304	8,306	12.0%
Jurlique	Operating income	(1,430)	(2,461)	1,031
Brands under development	Operating income	(704)	(851)	146

Note: For Jurlique and brands under development, the operating income YoY change is shown as the amount in mil. yen, following the source material. Consolidated results for each brand are shown by the company for reference purposes only (figures are unaudited).

Forecasts for Fiscal 2026

For the coming year the company plans consolidated net sales of 173,000 mil. yen (up 1.6%) and consolidated operating income of 17,300 mil. yen (up 10.2%), with beauty care operating income planned at 17,750 mil. yen (up 11.9%). Ordinary income is planned at 17,300 mil. yen (up 1.6%), while profit attributable to owners of parent is planned at 9,000 mil. yen (down 5.0%). POLA INC. will implement an early retirement program, the Next Career Special Support Plan, and an extraordinary loss of approximately 1.4 billion yen from the associated support payments is expected to be recorded and is reflected in the forecast. The plan assumes, for POLA, net sales approximately flat (domestic approximately flat to up 1%, overseas down approximately 4-5%) and operating income up approximately 3-4%; for ORBIS, net sales up approximately 4-5% and operating income up approximately 2-3%. Assumed exchange rates are 1.00 AUD = 97 JPY (previous year 96.49) and 1.00 CNY = 21 JPY (previous year 20.81). Capital investment and depreciation are each planned at 9,000 mil. yen to 10,000 mil. yen, against 8,385 mil. yen and 8,170 mil. yen respectively in FY2025.

Item (mil. yen)	Full-year Plan	YoY Change (Amount)	YoY Change (%)	FY2025 Full-year Results
Consol. net sales	173,000	2,714	1.6%	170,285
Beauty care	166,900	2,751	1.7%	164,148
Real estate	3,060	36	1.2%	3,023
Others	3,040	(72)	(2.3%)	3,112
Consol. operating income	17,300	1,606	10.2%	15,693
Beauty care	17,750	1,893	11.9%	15,856
Real estate	400	(21)	(5.1%)	421
Others	150	(68)	(31.2%)	218
Reconciliations	(1,000)	(198)	–	(801)
Ordinary income	17,300	277	1.6%	17,022
Profit attributable to owners of parent	9,000	(472)	(5.0%)	9,472

Shareholder Returns

For FY2025 the annual dividend is 52 yen, giving a consolidated payout ratio of 121.5%. For the coming year the company forecasts an annual dividend of 52 yen (interim 21 yen, year-end 31 yen) with a consolidated payout ratio of 127.8%. The stated policy is a consolidated payout ratio of 60% or higher, aiming for steady increases in dividends in line with profitable growth; purchases of treasury stock are to be considered based on the company’s investment strategies as well as market prices and liquidity of its shares. ROE was 5.8% in FY2025, against a 2026 target of 10% or higher and a 2029 target of 14% or higher.

Medium-Term Plan and Initiatives Going Forward

On the 2024-2026 Medium-term Management Plan, the company states that the domestic business has been slow to recover and that, overseas, the Chinese market environment is contrary to its initial expectations, so achieving the management indicators will be challenging. The management indicators for 2026 are consolidated net sales of 200.0 bil. yen (CAGR approx. 5%), consolidated operating income at an operating margin of 12-13%, domestic net sales CAGR approx. 4%, overseas net sales CAGR approx. 12%, an overseas sales ratio of 20%, ROE of 10% or higher, and a consolidated payout ratio of 60% or higher. Of the six growth strategies, the company rates strengthening the domestic customer base as slightly behind, growing the overseas business and achieving profitability in brands under development as behind, and enhancing the brand portfolio, strengthening R&D capabilities and strengthening sustainability as on track.

The policy for the coming year is to focus on enhancing and improving profitability and to establish a foundation geared for growth in future profit, after which the company will formulate and execute a new Medium-term Management Plan for 2027 onward, the final stage of VISION 2029. Domestically, POLA will rebuild the base of the salon channel (formerly referred to as the consignment sales channel) with esthetic services at its core, strengthen CRM and carry out a full renewal of the high-prestige B.A series; lower revenue is expected for the salon channel overall due to strengthened controls on secondary distribution. Overseas, revenue is expected to decrease for the Chinese business due to store closures, though the company aims for same-store sales to grow, while ASEAN is targeted for expansion through active roll-outs. Jurlique is continuing structural reforms and striving for profitability in 2026. Under VISION 2029 the targets for 2029 are consolidated net sales of 300.0 bn. yen, consolidated operating income of 50.0 bn. yen, a consolidated operating margin of 15% or higher, an overseas sales ratio of 30-35% and ROE of 14% or higher.

On sustainability, the company was selected by CDP as an A List company, the highest rating, for both climate change and water security for two consecutive years. ORBIS launched ORBIS THE CLEANSING OIL, which uses new technology developed by POLA CHEMICAL INDUSTRIES INC., and sales have exceeded the plan by more than 200%. POLA had comprehensive partnership agreements signed with eight prefectures and ten cities as of the end of 2025.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.