China's Yatsen Q2 revenue rises 5% as skincare growth offsets cosmetics decline - YSG News | RalliesChina's Yatsen Q2 revenue rises 5% as skincare growth offsets cosmetics decline
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YSG• Outlook
- Yatsen expects Q3 net revenue between RMB898.6 mln and RMB998.4 mln, down 0%-10% y/y
- Company aims to further optimize product portfolio and channel execution in coming quarters
- Yatsen says it will focus on improving marketing spend efficiency and operating cost structure
Overview
- China beauty group's Q2 revenue rose 5.1% yr/yr, driven by skincare brand growth
- Company posted a non-GAAP net loss, reversing a profit last year
- Yatsen expects Q3 revenue to fall up to 10% yr/yr
Result Drivers
- SKINCARE GROWTH - Co said 40.4% yr/yr revenue growth in skincare brands, led by clinical and premium brands, offset weakness elsewhere
- COLOR COSMETICS DECLINE - Co said color cosmetics segment faced structural headwinds and intensified competition, prompting portfolio streamlining
- GROSS MARGIN PRESSURE - Co said gross margin fell due to higher inventory provisions tied to brand portfolio optimization and SKU rationalization
Key details and analyst coverage
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|
| Q2 Revenue | | RMB 1.14 bln | |
| Q2 Adjusted Net Loss | | RMB 99.4 mln | |
| Q2 Net Loss | | RMB 90.8 mln | |
| Q2 Gross Margin | | 73.9% | |
| Q2 Gross Profit | | RMB 843.8 mln | |
- The one available analyst rating on the shares is "buy"
- The average consensus recommendation for the personal products peer group is "buy"
- Wall Street's median 12-month price target for Yatsen Holding Ltd is $4.00, about 50.4% above its September 1 closing price of $2.66
- The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 10 three months ago
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