Yatsen Unveils Financial Performance for Q4 and Full-Year 2023


Yatsen Holding Limited (“Yatsen” or the “Company”), a prominent beauty group based in China, has revealed its unaudited financial outcomes for the fourth quarter and full year concluding on December 31, 2023.

Key Points from Q4 and FY 2023:

  1. Total net revenues for Q4 2023 surged by 6.7% to RMB1.07 billion (US$151.1 million), compared to RMB1.01 billion in the corresponding period of the prior year. However, total net revenues for the entire year decreased by 7.9% to RMB3.41 billion (US$481.0 million) from RMB3.71 billion in the preceding year.
  2. Total net revenues from Skincare Brands witnessed a robust growth of 17.6% in Q4 2023, amounting to RMB554.8 million (US$78.1 million) from RMB471.6 million in the same quarter of the previous year. For the full year of 2023, Skincare Brands’ total net revenues increased by 11.4% to RMB1.38 billion (US$194.9 million), constituting 40.5% of total net revenues.
  3. The gross margin for Q4 2023 improved to 73.7%, up from 71.1% in the prior year period. Similarly, the gross margin for the entire year of 2023 increased to 73.6%, compared to 68.0% in the previous year.
  4. Net loss for Q4 2023 was RMB494.5 million (US$69.7 million), a significant increase from RMB55.0 million in the same quarter of the prior year. However, the full-year net loss for 2023 decreased by 8.7% to RMB750.2 million (US$105.7 million) from RMB821.3 million in 2022.
  5. Non-GAAP net loss for Q4 2023 amounted to RMB93.7 million (US$13.2 million), compared to non-GAAP net income of RMB34.7 million in the same quarter of the prior year. The full-year non-GAAP net loss for 2023 decreased by 34.6% to RMB296.1 million (US$41.7 million) from RMB452.9 million in the preceding year.

Jinfeng Huang, Founder, Chairman, and CEO of Yatsen, expressed satisfaction with the return to growth in Q4 2023, citing progress in the strategic transformation plan. He highlighted the substantial revenue growth in Skincare Brands and the positive brand repositioning of Perfect Diary.

Donghao Yang, Director and CFO of Yatsen, emphasized the successful financial performance in Q4 2023, surpassing previous guidance. He noted the significant year-over-year growth in combined net revenues for major skincare brands, improved gross margins, and a goodwill impairment of RMB354.0 million during the quarter. Yang expressed confidence in the company’s ability to advance its strategic plan with cash and investments totaling RMB2.08 billion.

Fourth Quarter 2023 Financial Highlights

Net Revenues

In the fourth quarter of 2023, total net revenues experienced a 6.7% growth, reaching RMB1.07 billion (US$151.1 million), compared to RMB1.01 billion in the corresponding period of the prior year. This increase was chiefly driven by a notable 17.6% year-over-year surge in net revenues from Skincare Brands. However, it was partially offset by a 1.8% year-over-year decline in net revenues from Color Cosmetics Brands.

Gross Profit and Gross Margin

Gross profit for Q4 2023 marked a 10.6% increase, reaching RMB790.1 million (US$111.3 million) compared to RMB714.6 million in the prior year period. The gross margin for the same period rose to 73.7% from 71.1% in the previous year. This improvement was attributed to heightened sales of higher-margin products and the implementation of more disciplined pricing and discount policies across the Company’s brand portfolio.

Operating Expenses

Total operating expenses for Q4 2023 witnessed a substantial 67.7% increase, amounting to RMB1.33 billion (US$187.3 million), up from RMB792.9 million in the prior year period. As a percentage of total net revenues, operating expenses for Q4 2023 reached 124.0%, compared to 78.9% in the same quarter of the previous year.

Fulfillment Expenses: Fulfillment expenses in Q4 2023 totaled RMB62.7 million (US$8.8 million), showing a marginal increase from RMB62.5 million in the prior year period. However, as a percentage of total net revenues, fulfillment expenses decreased to 5.8% from 6.2% in the prior year, owing to enhanced logistics efficiency.

Selling and Marketing Expenses: Selling and marketing expenses for Q4 2023 amounted to RMB717.4 million (US$101.0 million), rising from RMB535.2 million in the prior year period. As a percentage of total net revenues, these expenses increased to 66.9% from 53.2% in the prior year. The rise was primarily attributed to the Perfect Diary brand upgrade and the Company’s investments in new product launches across its brands.

General and Administrative Expenses: General and administrative expenses for Q4 2023 totaled RMB158.7 million (US$22.4 million), down from RMB169.9 million in the prior year period. As a percentage of total net revenues, these expenses decreased to 14.8% from 16.9%, primarily due to a reduction in share-based compensation.

Research and Development Expenses: Research and development expenses for Q4 2023 amounted to RMB36.9 million (US$5.2 million), rising from RMB25.1 million in the prior year period. As a percentage of total net revenues, these expenses increased to 3.4% from 2.5%, mainly due to an increase in personnel costs reflecting the Company’s commitment to enhancing its research and development capabilities.

Impairment of Goodwill: In Q4 2023, the impairment of goodwill was recorded at RMB354.0 million (US$49.9 million), compared to nil in the prior year period. This impairment reflects the excess of the carrying value of the Eve Lom reporting unit over its fair value, based on a quantitative goodwill impairment test, primarily due to weaker operating results than expected at the time of acquisition.

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