Q2 2026 Yatsen Holding Ltd Earnings Call Transcript
Key Points
- Skincare portfolio delivered exceptional performance, with revenues increasing 40.4% year-over-year and now representing 71.5% of total net revenues.
- Total net revenues grew 5.1% year-over-year despite a challenging industry backdrop, demonstrating resilience.
- R&D investment remained consistent at 3.3% of total net revenues, with continued scientific achievements including publications in international journals and recognition as a national high-tech enterprise.
- Strategic channel expansion into lower-cost B2B, offline distribution, duty-free, and professional channels is expected to support healthier profitability and reduce reliance on expensive online traffic.
- New CFO appointment brings over 15 years of experience in the consumer and beauty industry, expected to support cost optimization and sustainable profitable growth.
- Color cosmetics net revenues decreased 35.8% year-over-year due to proactive brand portfolio optimization and SKU rationalization.
- Gross margin decreased to 73.9% from 78.3% year-over-year, impacted by higher inventory provisions in the color cosmetics business.
- Operating loss widened significantly to RMB131.9 million from RMB65.5 million, with operating loss margin expanding to 11.5% from 5.1%.
- Selling and marketing expenses increased to 70.7% of net revenues from 66.5%, driven by rising traffic acquisition costs and strategic investments in high-growth channels like Douyin.
- The company expects total net revenues for Q3 2026 to decline by 0% to 10% year-over-year, indicating a potential slowdown in growth.
Ladies and gentlemen, good day and welcome to the Yatsen Second Quarter 2026 Earnings Conference Call.
Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Liu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.
Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor firm liability as established by the U.S. Private Securities Litigation Reform Act.
Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.
A general discussion of the risk factors that could affect Yasten's business and financial
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