Inflation Weighing on Unicharm's Profits; Hard to Offset Cost Increases by Premiumization

Narrow-moat Unicharm’s second-quarter core operating profits, falling more than 16% (currency neutral 22% decline), were somewhat below our expectation due to greater-than-expected input cost inflation and swelling selling expenses. While the degree of the cost increases for the second half is much greater than what management suggested in May,