On November 21, Yatsen Global, the parent company of Eve Lom, Galénic and the Chinese cosmetics brand Perfect Diary, announced its unaudited key financial data for the third quarter ending on September 30, 2023: Net revenue decreased by 16.3% year-over-year to RMB 718.1 million. The net revenue of skincare brands decreased by 4.1% year-over-year to RMB 258.5 million, but their proportion of total revenue increased from 31.4% in the same period last year to 36.0%. Additionally, the gross margin rose from 68.9% to 71.4%.
In terms of profit, the net loss for the third quarter decreased by 6.1% year-over-year from RMB 210.7 million to RMB 197.9 million. Notably, Yatsen Global achieved a turnaround from loss to profit in the first quarter of this year, marking its first quarterly profit since listing. However, it did not achieve profitability again in the second and third quarters.
*Cosmetics revenue includes income from brands such as Perfect Diary, Little Ondine, and Pinke Bear; skincare brand revenue comes from Abby’s Choice, DR.WU (Mainland China business), Galénic, Eve Lom, and other skincare brands.
David Huang, Founder, Chairman, and CEO of Yatsen Global, stated, “The Chinese cosmetics industry continued its moderate recovery in the third quarter. Our premium skincare brands, including Galénic, DR.WU, and Eve Lom, once again recorded revenue growth. We also upgraded Perfect Diary with a series of activities, repositioning the brand with a refreshed visual image and launching new products. Looking forward, we will continue to be flexible and advance our strategic transformation.”
Yang Donghao, Director and CFO of the company commented, “The net revenue for the third quarter is consistent with our previous guidance, indicating that our strategic transformation is essentially on the right track.“
In May 2022, Yatsen Global first disclosed its new five-year strategic transformation plan – to steadily advance “cutting fat and building muscle” over the next five years by optimizing business structure and controlling operating expenses.
“The net revenue of the three major skincare brands increased by 7.4% year-over-year, while our overall skincare brand revenue decreased mainly due to our strategic decision to gradually phase out the Abby’s Choice brand. Furthermore, the increase in net loss rate is mainly due to the increased investment in the Perfect Diary brand upgrade and preparations for the Double 11 sales event,” added Yang.
In June 2020, Yatsen Global officially launched its strategic new brand, Abby’s Choice, focusing on expanding into the mass skincare market.
Additionally, at the Shanghai CIIE in November this year, Yatsen Global first unveiled its “Yatsen’s Road of Science and Technology” strategic layout, aiming to become a new tech-driven beauty company.
Looking ahead, Yatsen Global expects its revenue for the fourth quarter of 2023 to reach RMB 1.01 billion to RMB 1.06 billion, a 0% to 5% increase year-over-year.
Furthermore, Yatsen Global disclosed in its financial report that it will further intensify its stock repurchase efforts, increasing the total amount of stock repurchases from USD 150 million to USD 200 million and extending the effective period until November 19, 2025.
As of the close on November 21, the group’s stock price rose by 12.4% to USD 0.79 per share, with a total market value of about USD 434 million, a decline of approximately 46% since the beginning of the year.
| Source: Official Financial Report
| Image Credit: Yatsen Global Official Website
丨Reporter：Wang Jiaqi
| Editor: LeZhi
