Yatsen (YSG) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenues declined 7.5% year-over-year to CNY 794.5 million, mainly due to a drop in Color Cosmetics Brands revenue.

• Skincare Brands revenue was flat or grew 5% year-over-year, now comprising 40.9% of total net revenues.

• Gross margin improved to 76.7% from 74.7% year-over-year, driven by higher-margin product sales.

• Net loss narrowed by 21.2% to CNY 85.5 million, with net loss margin improving to 10.8%.

• Management remains focused on product portfolio expansion, channel optimization, and profitability amid subdued market conditions.

Financial highlights

• Net revenues: CNY 794.5 million, down 7.5% year-over-year.

• Gross profit: CNY 609.4 million, down 5% year-over-year.

• Gross margin: 76.7%, up from 74.7% year-over-year.

• Net loss: CNY 85.5 million, improved by 21.2% year-over-year; net loss margin 10.8% vs. 12.6%.

• Cash, restricted cash, and short-term investments: CNY 1.58 billion as of June 30, 2024, down from CNY 2.08 billion at year-end 2023.

Outlook and guidance

• Q3 2024 net revenues expected between CNY 646.3 million and CNY 718.1 million, a year-over-year decrease of 0% to 10%.

• Guidance reflects current market and operational conditions and is subject to change.

• Focus remains on optimizing channel and product mix, cost structure, and achieving profitability.