Yatsen (YSG) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues declined 5.7% year-over-year to RMB677 million, mainly due to a 10% drop in color cosmetics, partially offset by 3.6% growth in skincare brands.

• Gross margin improved to 75.9% from 71.4% year-over-year, driven by higher-margin products and cost optimization.

• Net loss narrowed to RMB121.1 million from RMB197.9 million year-over-year; net loss margin reduced to 17.9% from 27.6%.

• Operating expenses fell 12% year-over-year, with notable reductions in general and administrative costs.

• Strategic transformation focused on expanding high-margin skincare, new product launches, and R&D investment.

Financial highlights

• Q3 2024 net revenues: RMB677 million, down from RMB718.1 million year-over-year.

• Gross profit: RMB513.8 million, up 0.2% year-over-year.

• Operating loss: RMB141.3 million, improved from RMB231.5 million year-over-year; operating loss margin 20.9%.

• Non-GAAP net loss: RMB6.6 million, improved from RMB30.2 million year-over-year.

• Net loss per diluted ADS was RMB1.22 (US$0.17), improved from RMB1.81 year-over-year; non-GAAP net loss per diluted ADS was RMB0.77 (US$0.11), improved from RMB1.19.

Outlook and guidance

• Q4 2024 net revenues expected between RMB1.07 billion and RMB1.18 billion, representing 0% to 10% year-over-year growth.

• Management confident in achieving year-over-year revenue growth in Q4, supported by innovation and brand building.