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Japan-Update

Fancl's supplements swinging back to profit in fiscal 2017

Stronger sales, scaled-back ad spending to drive turnaround

TOKYO -- Japanese health and beauty group Fancl expects to log a 1.1 billion yen ($9.8 million) operating profit in its nutritional supplements segment this fiscal year, the first black ink in four years.

The business posted an 865 million yen loss for the year ended March 31. But products to help with eye fatigue and to block sugar and fat absorption are seen as strong sellers.

Segment sales are projected to grow 11% to 35.5 billion yen, thanks to demand for core offerings. The Enkin line of eye fatigue products will likely enjoy a 27% jump. A new Calorie Limit offering due out next month is seen raking in 4.5 billion yen.

Fancl expects to reduce the segment's advertising spending 7% to 6.1 billion yen by focusing mainly on the web. Selling, general and administrative expenses as a percentage of sales are forecast to improve 5 points to 65.5%. The company spent aggressively on television and other advertising in fiscal 2016 but is now pulling back, thanks to the effort's success in increasing brand recognition.

(Nikkei)

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