Yatsen’s Q1 Revenues Rise 22.5% to RMB1.02 Billion, Loss Widens
YSG•Yatsen’s Q1 net revenues rose 22.5% year-on-year to RMB1.02 billion, driven by a 58.5% surge in skincare sales while color cosmetics slumped 5%. Operating expenses jumped 32.5% to RMB918.1 million, resulting in a RMB61.9 million net loss despite an expanded gross margin of 80.2%.
1. Strong Revenue Growth
Yatsen’s total net revenues for Q1 2026 climbed 22.5% year-over-year to RMB1.02 billion, propelled by a 58.5% increase in skincare brand sales. Color cosmetics revenue fell 5%, reflecting heightened competition in that segment.
2. Rising Expenses and Losses
Operating expenses surged 32.5% to RMB918.1 million, driven by elevated selling and marketing costs at 72.2% of net revenues and increased R&D spending at 3.9%. These higher costs contributed to an operating loss of RMB99 million and a net loss of RMB61.9 million.
3. Gross Margin Improvement
Gross profit grew 24.3% to RMB819.2 million, lifting gross margin to 80.2% from 79.1%. This margin expansion underscores the company’s ability to leverage scale despite rising input costs.
4. Cash Flow and Financing
The company ended Q1 with RMB934.2 million in cash, restricted cash and short-term investments after using RMB90 million in operating activities. A completed first tranche of a private placement of convertible notes and warrants brought in Hillhouse as a strategic investor.
