Yatsen Holding Limited (NYSE: YSG), a beauty group based in China, has released its unaudited financial results for the third quarter ended September 30, 2023. The company reported a decline in total net revenues for the third quarter of 2023 compared to the prior year period.
Total net revenues for the third quarter of 2023 decreased by 16.3% to RMB718.1 million ($98.4 million) compared to RMB857.9 million ($119.96 million) in the same period of the previous year. This decline in revenue was primarily driven by a 21.5% year-over-year decrease in net revenues from Color Cosmetics Brands and a 4.1% year-over-year decrease in net revenues from Skincare Brands.
However, there was a positive development in the contribution of Skincare Brands to the total net revenues. In the third quarter of 2023, total net revenues from Skincare Brands amounted to RMB258.5 million ($35.4 million), accounting for 36.0% of the total net revenues. This marks an increase from 31.4% in the prior year period.
The gross margin for the third quarter of 2023 improved to 71.4% compared to 68.9% in the same period of the previous year, indicating a positive trend in profitability.
Yatsen also reported a decrease in net loss for the third quarter of 2023, which amounted to RMB197.9 million ($27.1 million), a 6.1% reduction from RMB210.7 million ($29.46 million) in the prior year period. The net loss margin for the third quarter of 2023 was 27.6%, slightly higher than the 24.6% recorded in the prior year period. Additionally, the non-GAAP net loss for the third quarter of 2023 increased by 3.0% to RMB130.2 million ($17.9 million) compared to RMB126.5 million in the same period of the previous year.
Mr. Jinfeng Huang, Founder, Chairman, and Chief Executive Officer of Yatsen, expressed that China’s beauty industry experienced a modest recovery in the third quarter despite uncertainties in consumer demand. Yatsen remained focused on strengthening brand equity through superior product performance and consumer satisfaction. The company’s clinical and premium skincare brands, including Galénic, DR.WU, and Eve Lom, achieved growth in combined net revenues for another quarter. Furthermore, Yatsen revitalized Perfect Diary through various campaigns, introducing a refreshed visual identity and launching new products. Looking ahead, the company aims to adapt flexibly and continue its strategic transformation.
For the fourth quarter of 2023, Yatsen anticipates its total net revenues to be between RMB1.01 billion and RMB1.06 billion ($148.2 million), representing a potential year-over-year increase of 0% to 5%.
