Yatsen (YSG) Q2 2026 Earnings Call: Skincare Growth, Wider Loss
Source Tradingkey
Key Takeaways
- Yatsen (YSG) reported Q2 2026 net revenue of RMB 1.14 billion, up 5.1% year over year, despite what management described as a challenging beauty industry backdrop.
- Skincare revenue increased 40.4% and reached 71.5% of total net revenue, while Color Cosmetics revenue declined 35.8% amid brand portfolio optimization and SKU rationalization.
- Gross margin fell to 73.9% from 78.3%, primarily due to higher Color Cosmetics inventory provisions. Management said the underlying gross margin would have been broadly stable excluding these provisions.
- Net loss widened to RMB 90.8 million from RMB 19.5 million. Non-GAAP net loss was RMB 99.4 million, versus non-GAAP net income of RMB 11.5 million a year earlier.
- Selling and marketing expenses rose to 70.7% of revenue, reflecting investment in core skincare brands and higher traffic acquisition costs on Douyin.
- Management expects Q3 2026 net revenue of RMB 898.6 million to RMB 998.4 million, representing an approximate year-over-year decline of 0% to 10%.
Key Financial Data
| Metric | Q2 2026 | Q2 2025 | Year-over-year change / comment |
|---|---|---|---|
| Total net revenue | RMB 1.14 billion | RMB 1.09 billion | Up 5.1% |
| Skincare revenue | — | — | Up 40.4%; 71.5% of total revenue |
| Color Cosmetics revenue | — | — | Down 35.8% |
| Gross profit | RMB 843.8 million | RMB 850.4 million | Down 0.8% |
| Gross margin | 73.9% | 78.3% | Lower inventory provisions in Color Cosmetics weighed on margin |
| Total operating expenses | RMB 975.7 million | RMB 905.9 million | Up 7.7%; 85.4% of revenue versus 83.4% |
| Selling and marketing expenses | RMB 807.6 million | RMB 722.4 million | 70.7% of revenue versus 66.5% |
| R&D expenses | RMB 37.3 million | RMB 36.1 million | 3.3% of revenue in both periods |
| Operating loss | RMB 131.9 million | RMB 55.5 million | Operating loss margin widened to 11.5% from 5.1% |
| Non-GAAP operating loss | RMB 112.1 million | RMB 20.4 million | Non-GAAP operating loss margin widened to 9.8% from 1.9% |
| Net loss | RMB 90.8 million | RMB 19.5 million | Net loss margin widened to 8.0% from 1.8% |
| Diluted loss per ADS | RMB 0.97 | RMB 0.19 | Attributable to Yatsen ordinary shareholders |
| Non-GAAP net income/(loss) | Loss of RMB 99.4 million | Income of RMB 11.5 million | Margin of negative 8.7% versus positive 1.1% |
| Operating cash flow | Outflow of RMB 78.0 million | Inflow of RMB 77.7 million | Cash generation turned negative |
| Cash, restricted cash and short-term investments | RMB 1.06 billion | RMB 1.05 billion at Dec. 31, 2025 | Balance as of June 30, 2026 |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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