I will now present our financial results for the third quarter of FY 2026. There are four key points I would like to highlight today. First, we have further enhanced earning power across the Kao Group. Q3 year-to-date operating income rose 28.1% year-on-year to JPY 146.5 billion. Net sales, net income, and EPS all reached record highs, further increasing our confidence in achieving the full-year operating income forecast of JPY 190 billion. Second, the GC business continued to grow steadily. Even as we implemented selling price increases, sales volume, etc., rose 1.2% year-on-year, delivering results in both price and volume.
Our share of the H&PC market in Japan increased 0.4 points to 25.3%. Third, our growth businesses continued to expand. Operating income in Cosmetics increased for seven consecutive quarters, while electronic materials sales grew approximately 20%. These businesses are steadily strengthening their ability to drive future growth. Fourth, our initiatives for Q4. Building on the recent improvement in earning power, we will steadily strengthen the earnings base, mainly in businesses outside Japan, to achieve K27 and support sustainable growth thereafter.
I will now review our consolidated financial results for Q3 year-to-date. Net sales rose 7.1% year-on-year to JPY 1,319.3 billion, with like-for-like growth of 3.1%, excluding the effect of currency translation. Gross margin improved 1.1 points year-on-year to 40.1%. Our initiatives, including selling price increases and higher value-added offerings, are delivering tangible results. Operating income rose JPY 32.1 billion, or 28.1%, year-on-year to JPY 146.5 billion, and the operating margin improved to 11.1%.
Importantly, even excluding the JPY 11.5 billion gain on sale of land, operating income increased JPY 20.6 billion year-on-year. This demonstrates the steady improvement in our underlying earning power. Net income was JPY 105.7 billion, net income attributable to owners of the parent was JPY 105.1 billion, and basic earnings per share was JPY 116.2 sen. Net sales, net income, and EPS all reached record highs. Next, I will review the results for Q3 alone, from July through September.
Net sales were JPY 447.4 billion, up 2.4% on a like-for-like basis. Gross margin improved 0.7 points year-on-year to 40.7%. Operating income increased JPY 5.5 billion, or 12.1%, year-on-year to JPY 50.7 billion, and the operating margin improved to 11.3%. Following the first half, Q3 also delivered growth in both sales and operating income, with steady improvement in profitability. We are making solid progress toward achieving full-year operating income forecast of JPY 190 billion. I will now discuss the key points of our Q3 year-to-date results and our future initiatives.
We position FY 2026 as a year to further strengthen the repeatability of our earning power and accelerate the shift toward sustainable growth. In the GC business in Japan, market share continued to expand following selling price increases, further strengthening our earnings base. In the GC business outside Japan, Cosmetics grew 11% and Health Beauty Care grew 7% in Asia, driving growth. In the Chemical business, selling price adjustments continued to have a positive effect, while performance chemicals and information materials, centered on electronic materials, grew steadily.
Against this backdrop of improved earnings, ROIC rose to 11.2%. Although this includes the impact of the gain on sale of land, capital efficiency is also improving steadily. In Q4, we will continue to focus on growth areas while strengthening the earnings base of businesses outside Japan, with K27 and subsequent growth in view. At the same time, our outlook incorporates certain risks, including the impact of higher raw material costs in the GC business shifting from Q3 and fluctuations in fats and oils market prices in the Chemical business.
And next, I will review Q3 year-to-date sales performance. GC business sales increased 3.4% on a like-for-like basis, driven by solid growth in Japan. Sales in Japan rose 4.6% even as we implemented selling price increases. Outside Japan, Cosmetics grew 11.1% and Health Beauty Care grew 6.8% in Asia. However, challenges remain in certain businesses, including in Europe and other region, and we are strengthening their earnings base. Chemical business sales increased 2.5% on a like-for-like basis. The positive effects of selling price adjustments continued, while performance Chemicals and information materials, centered on electronic materials, drove growth.
Alongside stable growth in Japan, our focus areas outside Japan and growth fields in the Chemical business are expanding steadily. Going forward, we will broaden this growth and accelerate profitability improvements in businesses facing challenges. Next, I will review results by segment. Operating income increased across all segments of the GC business, rising JPY 16.3 billion year-on-year. By promoting high value-added products and price pass-through, we improved profitability while offsetting higher raw material costs.
In fabric and home care, laundry detergents in Japan maintained strong market share and sales after selling price increases. Higher value-added offerings and price pass-through contributed to an improved operating margin. In Health Beauty Care, skin care sales grew in Asia and the Americas, while growth in high value-added products in Japan contributed to higher operating income. In Cosmetics, sales growth in Japan and Asia, together with improved profitability, drove a substantial operating income increase of JPY 6.9 billion. The operating margin of the GC business outside Japan improved 2.1 points year-on-year to 8.1%.
While focus businesses outside Japan achieved strong growth in both sales and earnings, we are prioritizing earnings improvements over sales growth in businesses facing challenges. Operating income in the Chemical business also increased JPY 4.7 billion. Improved margins from selling price adjustments and growth in performance chemicals and information materials contributed to higher earnings. Pages 11 and 12 show sales and segment results for Q3, from July through September. Please refer to the details later.
I will now move to page 13. I will explain the factors behind the change in operating income. Operating income increased JPY 32.1 billion, from JPY 114.4 billion in the same period last year to JPY 146.5 billion. What I particularly want to emphasize is the steady improvement in the earning power of the GC business. Against the negative impact of JPY 5.5 billion from higher raw material costs, selling price increases generated a positive impact of JPY 21.5 billion, and sales volume growth contributed JPY 9.0 billion. The key point is that price is driving growth in H&PC products, while sales volume is driving growth in Cosmetics.
In H&PC products, the launch of high-value-added products that offer consumers new value and convenience enabled price growth above the market growth. On the other hand, in Cosmetics, we captured the polarization in consumer spending and achieved sales volume growth above the market in both prestige and mass market price segments. The improvement in earning power, combining selling price increases with TCR and product mix improvements, amounted to approximately JPY 18.5 billion.
The Chemical business also generated a positive earnings impact of JPY 4.7 billion. At the same time, we continued strategic investments in human capital and marketing to support future growth. An important point in these results is that we achieved earnings growth by improving underlying profitability while continuing to invest for growth. Next, I will discuss the further improvement in earning power. The group-wide gross margin reached 40.1%, improving 1.1 points year-on-year.
In the GC business, the launch of high-value-added products that capture changes in customer needs and purchasing behavior, together with TCR, product mix improvements, and price pass-through to offset higher raw material costs, is delivering steady results. As a result, the gross margin of the GC business improved 1.4 points year-on-year and exceeded the FY 2019 level. Importantly, these improvements are not temporary. They reflect our efforts to enhance the value we deliver to customers while improving our earnings structure. We will continue to capture changes in customer behavior and further strengthen the mechanisms that generate sustainable earnings.
Next, I will explain Kao's unique model that supports profitable growth in the GC business in Japan. It starts with continuously capturing changes in consumers' lifestyles and purchasing behavior and enhancing the value we deliver. Kao has diverse strengths, including proprietary technology and strong brands, close partnerships with retailers through our direct sales model, stable supply and inventory management through in-house logistics, and scientific marketing based on data. As explained at our marketing strategy briefing on July 14th, scientific marketing also includes AI-driven approaches that integrate market data like an orchestra and rapidly visualize the results.
The key is to combine these strengths and flexibly and swiftly implement four measures in an integrated manner: selling price increases through higher value-added offerings, product mix improvements, cost reductions through TCR, and appropriate price pass-through of higher raw material costs. As a result, consumers continue to choose our products even after selling price increases, enabling us to expand sales volume and market share while improving profitability. This interaction among our strengths, which continuously generates earnings, is what makes Kao's model unique. We will continue to refine this model and translate it into sustainable profitable growth.
Next, I will explain the tangible results of these initiatives. By consistently offering high-value-added products that meet customer needs under a coherent brand strategy, we are strengthening both brand loyalty and market share. Kao's share of the H&PC market in Japan reached 25.3%, up 0.4 points year-on-year, exceeding the prior year level for 13 consecutive quarters. We are also gaining market share in key categories, including laundry detergents, sunscreens, and facial cleansers.
In Cosmetics, sales of our six focus brands increased 13% despite a year-on-year decline in the overall market, significantly outperforming the market. We drive growth by creating new value in premium price segments while maintaining and expanding a stable customer base in mass market price segments. These two approaches enable us to expand market share and improve profitability, further strengthening the earnings base of the GC business in Japan. Next, I will discuss the results of our new products.
In higher value-added offerings, Bioré Deep-Pore Melting Clay Facial Wash and est Genoluxe Cream have performed strongly, winning customer support through their unique value propositions. To expand our customer base, Magiclean Anti-Mold Air Diffuser and SOFINA BASIC are creating demand in new categories and price segments. In particular, new-to-brand customers accounted for 73% of SOFINA BASIC customers. In this way, we are improving profitability through higher value-added offerings while expanding growth opportunities by acquiring new customers, supporting profitable growth in the GC business in Japan.
Outside Japan, concentrating management resources on focus brands in strategic areas is steadily delivering growth. In Cosmetics, we are advancing our global three strategic expansion models, strengthening KATE in Thailand and Curél in the Americas and Europe. SENSAI also continued to grow steadily in Europe, and Cosmetics sales overall increased 5%. Skin protection sales increased 10%. Bioré UV maintained strong performance at key strategic retail chains in North America and expanded its rollout in Asia. Bondi Sands also continued to outpace market growth in North America.
Jergens sustained sales growth as restaged products and digital initiatives increased penetration among younger consumers. In sanitary, Laurier achieved double-digit growth in China and maintained solid performance in Indonesia. Electronic materials in the Chemical business achieved strong growth of 19%, capturing demand from generative AI and data centers. These results show that our focus areas outside Japan are delivering steady growth. We will now translate this sales growth into sustainable earnings growth and further improve profitability across our businesses outside Japan.
Next, I will discuss the Chemical business. In Q3 year- to- date, the effects of selling price adjustments, mainly in Japan and Asia, together with growth in performance chemicals and information materials, contributed to higher operating income. In particular, electronic materials for semiconductors and hard disks maintained strong performance, while performance chemicals steadily captured demand related to information infrastructure, including data centers.
In Q4, however, we need to remain alert to sharp fluctuations in fats and oils market prices and intensifying competition in Asia. In oleochemicals and consumer care chemicals, we will reinforce pricing and inventory management to maintain profitability. In electronic materials, we will accelerate customer adoption and sales expansion, primarily in semiconductor-related fields.
By addressing market volatility while expanding growth areas, we will further strengthen earning power in the Chemical business. Next, I will explain the impact of raw material prices. Raw material prices continued to rise in the GC business, but their impact on earnings through Q3 was more limited than expected. This is because part of the cost increase remains in inventory following transitions to new products and other changes. Most of the earnings impact is therefore expected to shift to Q4.
Meanwhile, selling price increases are progressing faster than planned, steadily strengthening our ability to offset higher raw material costs. In the Chemical business, we are reinforcing pricing and inventory management to prepare for potential inventory valuation effects from sharp fluctuations in fats and oils market prices. We now expect the full-year earnings impact of higher raw material costs to be approximately JPY 16.5 billion year-on-year, about JPY 1.0 billion worse than our previous forecast.
We will work to maintain and improve profitability through selling price increases and appropriate inventory management, even amid rising costs and market volatility. Next, I will explain our full-year operating income outlook. We have maintained our full-year operating income forecast of JPY 190 billion, an increase of JPY 26.5 billion year-on-year, or JPY 15.1 billion excluding the gain on sale of land. With Q3 year-to-date operating income reaching JPY 146.5 billion, we believe the likelihood of achieving our full-year forecast has increased further.
This reflects a further improvement in earning power. We expect a full-year earnings benefit of more than JPY 27.5 billion from selling price increases, TCR, product mix improvements, and other measures. Sales volume growth, particularly in Cosmetics, will also contribute to earnings growth. In Q4, our forecast incorporates the delayed impact of higher raw material costs in the GC business, measures to strengthen the earnings base of businesses outside Japan, and investments for future growth.
We also anticipate risks from fluctuations in fats and oils market prices in the Chemical business. As a result, we expect Q4 operating income alone to be lower than a year earlier. This does not mean that our underlying earning power is weakening. Rather, building on our recent improvement in profitability, we are steadily implementing initiatives to achieve K27 and support growth beyond it. By pursuing these initiatives while managing risks, we aim to achieve our full-year operating income forecast of JPY 190 billion.
Finally, I will discuss our progress toward K27. Q3 year-to-date ROIC improved 2.0 points year-on-year to 11.2%. Because this figure includes the effect of the gain on sale of land, we have maintained our full-year ROIC forecast of 10.5%. Nevertheless, capital efficiency continues to improve steadily. We forecast operating income of JPY 190 billion for FY 2026 and are making strong progress toward our K27 targets of record-high operating income exceeding JPY 211.7 billion and ROIC of at least 11%.
These results confirm that the earning power of the GC business in Japan has strengthened further and that businesses positioned to drive our next phase of growth, such as cosmetics and information materials, are expanding. Going forward, we will translate sales growth in these businesses into greater earnings growth. For businesses facing challenges outside Japan, we will accelerate earnings structure reforms and further improve profitability and capital efficiency.
Our immediate priority is to deliver our FY 2026 plan and achieve our K27 targets while building a business structure capable of sustainably maintaining, improving, and achieving ROIC of at least 11%. K27 is not the finish line, but a milestone on the path to our next stage of growth. We will evolve the earning power we have built into a sustainable capacity for growth, driving further earnings growth and enhancing corporate value. This concludes my presentation. Thank you very much.