Yatsen (YSG) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 net revenues rose 7.1% year-over-year to RMB 1.15 billion, outperforming a declining beauty market in China and driven by a 16.4% increase in Color Cosmetics Brands and recovery in Perfect Diary.

• Full year 2024 net revenues declined 0.6% to RMB 3.39 billion, indicating stability amid industry headwinds.

• Gross margin improved to 77.8% in Q4 and 77.1% for the year, up from 73.7% and 73.6% respectively, driven by higher-margin products.

• Q4 non-GAAP net income margin reached 9.3%, reversing a non-GAAP net loss in the prior year; full year non-GAAP net loss margin improved to 3.8%.

• Strategic transformation focused on balancing skincare and color cosmetics, optimizing product/channel mix, and cost control.

Financial highlights

• Q4 gross profit increased 13% year-over-year to RMB 893 million; full year gross profit up 4.1% to RMB 2.62 billion.

• Q4 operating loss reduced to RMB 390.7 million (margin 34% vs. 50.3% prior year); non-GAAP operating income RMB 93.2 million (margin 8.1%).

• Q4 net loss margin improved to 33% from 46.1%; full year net loss margin improved to 20.9% from 22%.

• Cash, restricted cash, and short-term investments at year-end: RMB 1.36 billion.

• Net cash generated from Q4 operating activities: RMB 202.2 million; full year net cash used in operations: RMB 243.7 million.

Outlook and guidance

• Q1 2025 net revenues expected between RMB 788.8 million and RMB 866.2 million, up 2%-12% year-over-year.

• Focus remains on balancing growth and profitability, with continued investment in R&D and operational efficiency.