YSG - Earnings call 3 2023 | Yatsen Holding Limited

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Operator

Ladies and gentlemen, good day, and welcome to the Yatsen's Third Quarter 2023 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investments and Capital Markets. Please go ahead.

Irene Lyu

Thank you, operator. as today performance forward-looking qualify and safe from discussion the relating for the U.S. harbor future the company's are liability note will statements contain to the Please by established intended to Private Securities Reform Litigation Act. performance statements to are and factors. certain Such assumptions subject uncertainties, and of and not guarantees other are future risks

today's actual differ materially from of are the beyond to Some and company's control discussion. mentioned results in press these risks and release this could cause those

could affect the general business of Securities discussion to risk factors forward-looking except in does of A results update financial filings and company information, included obligation as company Yatsen's is undertake The the and the any required not this Exchange by certain Commission. with law.

discuss purposes for financial GAAP release reconciliation also certain to of the a earnings a financial During non-GAAP only. earlier see financial results. today's comparison today for non-GAAP of non-GAAP issued definition management measures Please and call, measures will

Joining Huang, senior us Donghao CFO today on will session. are and will and remarks, the conclude Director. Q&A Founder, begin Yang, call and our Mr. the with Mr. our and Management Yatsen's CEO; team management prepared Chairman with the call from Jinfeng

conference this recorded. reminder, a be As is

conference In on ir.yatsenglobal.com. addition, webcast call replay Relations website will this a also available Investor be of Yatsen's at

to now Jinfeng will sir. call Huang. over turn Mr. I the Please go ahead

Jinfeng Huang

year-over-year, XXXX, total increased grew third recovery retail quarter. the National of beauty pandemic in Bureau quarter the goods mild XXXX Statistics second Third began year-over-year, quarter and as growth the for beauty earnings sales X.X% representing in Yatsen's from Thank by both deceleration X.X% the today. from consumer of sales a in Irene, total country participating you, rate call According China, In of thank the that you, the everyone, retail by year. and to year-over-year this industry of earlier phase conference emerged the China's remained

the pattern third quarter. Online showed in similar a sales beauty

uncertainties sales total to committed recorded its brand and rate equity Yatsen strong performance For on product the slower Skincare, growth in both consumer on consumer strive combined than strategic We a XXXX. Amid satisfaction. Douyin the remains Tmall Color and superior continuously build Cosmetics in of demand, and plan. quarter transformation based to second

quarter recorded total net with third our XXXX, million, RMB guidance. of in the XXX.X For of we period revenue line

declined decisions Net the strategy to revenue Skincare Abby's year-over-year, for brand. our our X.X% attributable brand phase mainly out to Choice by

delivered in Our net compared contribution their year-over-year to premium net Lom increasing period. brands, with as another including further prior X.X% and and and clinical revenues total performance combined Galénic, the growth Skincare recording DR.WU Eve with solid revenues year

stores. offline in by a and third revenues of with new quarter due Color The Diary Net off-line result to ago. product of primarily quarter the totaled end as third as the decreased the end of from underperforming Cosmetics of stores compared the decline Perfect of XXX year-over-year, near year closure brands Diary's of timing Perfect the XXX the number XX.X% launches of the a sales

among targeted third rising respectively Net optimization gross to Diary in the contribution continued expanded margin across and portfolio. in XX.X% investments Perfect Pink loss we margin XX.X% margin brands and ongoing to upgrades Yatsen's their the due both XX.X% for XX preparations awareness Shopping in year consumers. and Skincare cost prior as as raised Festival. Bear from the the grow loss revenues from net the brands and brand brand gross from Ondine the to in improved higher XX.X%, non-GAAP our period to Net Little increased Double brand and quarter

our now brands to Turning and products.

Biolip Biolip a Perfect barrier. new Diary product, new lip's creates protect our product essence identities series we a brand's to skin launches. brand, carrying upon sebum with application of the exclusive quarter campaigns XXXX, and film fragile refreshed The third which bionic During of the out technology, lipstick, hero the leverages repositioned visual

validated Ruijin lip prestigious reduction Biolip's in line efficacy was Hospital by agency. and strong the SGS testing

Our Bear, co-branding formed brands, that with with X [indiscernible] resonated young popular consumers. Ondine other both deeply Little partnerships and Color Pink Cosmetics

brand, well-known we continued engage in Skincare Foundation. also building, Paris the scientific Dermatology The cultivating and research XXth brand Hospital and hosted its Galénic Louis, distinctive in further audience. in with brand's our brand of anniversary Research celebrities, For to cooperation its media announced officially established dermatology deeply scholars with hospital celebration Saint that gala a marked Galénic Paris. array each an

provider in mandelic In pioneer brand clinical brand Asia's celebrated Its continued honored high-quality a the was addition, strengthen DR.WU its XXth of skincare to as the reputation leading acid as and a use mandelic-based a anniversary. market as customer [Technical awareness introduced of its independent and broader the [indiscernible] Difficulty], ambassador as world's Furthermore, analysis. to actor base. industry renounced [indiscernible] brand research and a singer top brand and establish increase brand

September, Yatsen conference At and also peptide jointly has IFSCC ingredients, presented the on new collaborate research and as into Lubrizol, with a on the Spain anti-aging leader, brand Yatsen's were Open Galénic revenues patent Lab R&D Moving announced research entered development research boundaries. peptide. cooperation of that expand to product paper in algae R&D. to the the In conference, snow Galénic and [ a strategy it expenses the ] global and a X.X%. scientific attended on percentage Barcelona, brand's

over I on call update to like to would an the handing provide repurchase Before share our Donghao, program.

our and Program change to of November demonstrated value our today, the This of USD size of further XXXX. under term our has million Share XX, through the prospects. a confidence program, the in Yatsen's and earlier that the of aggregate to expanding shares increasing Board and effective may repurchased Repurchase authorized announced Share As Repurchase USD Program from term the Directors repurchase be share million XXX XXX approved

is China's modest a beauty To this year. recovery summarize, in of market process the still

will continue and and adapt our Looking confident plan. are our resources advance ability we flexibility transformation in forward, to to strategic

performance. CFO, discuss Yang, our financial over the call to to I will Donghao our that, With everyone. you, now turn Thank

Donghao Yang

everyone. hello, you, Thank and David,

to unless today I numbers percentage Before that like presented all I clarify would in noted. financial to get are amounts otherwise Renminbi all year-over-year and refer changes started, changes

by the the of quarter attributable decrease from XX.X% RMB year for RMB decreased brands revenues revenues XX.X% million XXXX from third in decrease million X.X% revenues in to XXX.X primarily net was Skincare prior a Cosmetics Color net brands. Total decrease combined net period. year-over-year for year-over-year The XXX.X a to with from

and year million the the margin from RMB RMB increase our thirdly, for by first, discount increased by profit from The third more Gross driven period. sales the gross Skincare Gross for of from in quarter pricing and and period. to to decreased of third of million secondly, optimization disciplined across XX.X% portfolios. brand quarter year brands; XXXX prior XXX.X prior all increasing XX.X% higher cost for policies; was margin the products XXXX XXX.X XX.X% of

expenses prior operating quarter million year of period. from XXX for XXXX RMB XXX.X million for Total decreased the the XX.X% by to RMB

total year net compared total prior the percentage for for the of compared of third were a for million the XX.X% XXXX with Fulfillment As third for XX revenue, year prior expenses quarter expenses the quarter period. RMB of as period. XXXX operating as million XX.X RMB with XXX.X% were

X.X% attributable increase XXX.X the and expenses deleveraging from of period. XXX.X The primarily percentage of RMB lower increased of for As RMB prior was quarter marketing period. X.X% for the for to XXXX quarter million the net were fulfillment expenses of the effect third compared total third to a revenues revenue, the XXXX year net in XXXX. of with prior the as Selling million third quarter year for

attributable to for increased third XX.X% from brand and percentage marketing the and quarter increased of to for the of total upgrades XXXX was period. Festival. in the expenses Double Shopping a primarily As Perfect the preparation net for prior investments year revenues, XX increase selling XX.X% Diary The

RMB million million the as for period. compared General XXXX of prior were and administrative the with XXX.X XXX.X quarter expenses year for third RMB

XXXX for prior decrease for quarter decreased total general in a As XX.X% XX.X% attributable a administrative administrative compensation was a third decrease expenses general and year and primarily headcount. percentage to of revenues, in the to The reduction the period. from corresponding to net of

RMB the prior million as RMB Research and year XX.X XXXX development the of for period. expenses for XX.X million compared quarter were with third

a As to research The decrease development efforts X.X% our attributable a research prior and level decreased year the X.X% at expenses net quarter for of and the XXXX maintain revenues, expenses percentage was relative net to primarily development reasonable period. third total revenue. to of to for from total

attributable the for the prior X.XX XX.X% the quarter of with year from with compared third per operations was the year year million period. decreased third ordinary third XXXX was Non-GAAP Yatsen's million ADS the for margin was with to XX.X% loss XXXX with RMB net compared with X.X% as the third RMB loss million the prior prior RMB quarter for XXX.X Yatsen's shareholders Net million for loss XXX.X year XX% prior quarter diluted loss for million of XXX.X of prior from to Operating to period. for from period. RMB prior RMB prior period. Net XXXX X.XX for for loss margin increased for the of the loss compared prior of year for year $X.XX XXX.X the to prior period. net quarter by Non-GAAP for for from for diluted the X.XX XXX.X compared period. ADS RMB RMB from X.X% to compared the loss compared with RMB the XXXX year period. period. XX.X% million by by margin from as the shareholders the Loss as was to net decreased period. was million for quarter year increased XX.X% XXXX XXXX XXX.X loss XXX.X period. Non-GAAP third for operations of XX.X% XX.X% third Net as RMB RMB XX% as Non-GAAP year by as Non-GAAP RMB attributable operating X% quarter loss prior year the margin ordinary million was per XX.X% for XXX.X

had X.XX compared XXX.X used for Net third XX, net RMB million from cash operating short-term XXXX, the X.XX cash million and billion prior As of XXXX. RMB billion XX, December generated was cash, of of activities restricted period. compared we as XXXX with RMB of as XX.X activities for operating cash of in with quarter investments year September RMB the

to RMB fourth views like our These current to preliminary subject quarter X% X% call of our Looking are for we net to conditions, RMB billion, increase that, be to and I total representing between outlook business to the would which and open expect reflect XXXX, year-over-year. revenues change. With a X.XX forecasts billion X.XX market and Q&A. on the operational our the now at

Operator

[indiscernible] [Operator comes CICC. The question from with first Instructions]

Unknown Analyst

X have questions. I

Biolip products also and The first of one regarding of is seen We've foundations the Perfect the QX. Diary. lipstick essence new launch in

question. customers? got there next first in should the any we've expect year? we And from for feedback This So is performance your how on is the

our revenue about is question guidance. We've second signal. positive my QX, encouraging which guided for is And an a growth

behind like management in So guidance, for Cosmetics more expectation us question. us for QX? key and this you. my Thank could are what achieve give sectors goal? And to that on drivers both Skincare That's the Color your color

Irene Lyu

is users Diary which Let its lipstick. one. September, me new very take end feedback the from first is have Well, a philosophy our the in lipstick. launch, positive enjoy bio is the of essence efficacy the benefit we makeup they received lipstick Perfect perfect as Basically, to launch very efficacy After strong combined very lipstick. our with have in-level look from from the

one. number that's So

including, upgrades, and user product the consumers the Zs new brand high-value and we price class. also launch. But after our from the mostly the then with to coming shift new to the we benefits, this example, start brand And points to sophisticated our cities. consumers increase upper more lipstick are started young launched given for also upgrade the bolt-on our lower-tier then buy to moms consumers young secondly, start also and and Historically, our and Gen after profile that also see new middle

also the Tmall ranking we very performance launch, have on seen and positive since Douyin. both And

end gain of the So see QX at was the September, QX contributed this of much the in launch performance. to we Double market of But really share. to XX, so only to lipstick the continued and haven't product it

Donghao Yang

second September, started I answer P&L of our already show end the the question, of Yes. your contribution we end product, Perfect question. -- our for on part from towards of the new launched And QX. sales mid- products, new Diary, think And to starting in QX. your covered those Irene We to

many strong And products skin One other care traditionally been at been season has reason. is one and main if our main have that's QX care growing strong expecting our past care brands. So growth the skin products. are we care a for fast the look quarters, and brands reason really from -- you skin in X skin those

-- brand the year-over-year in a QX. all skin the decline we X% of strong other to of And So slowdown brands, Perfect we guidance care from decline why therefore, of those strong in are all, growth that's expecting and Diary growth. sales quarter the X% with gave

As been bottomed has declining. X company the to traction past And years, future. out, and almost you we the gain know, have in that our the in do expect of decline to foreseeable sales start the hopefully, sales

Operator

This session. question-and-answer concludes would to I to comments. any the call Instructions] Irene the Lyu closing like turn for [Operator over

Irene Lyu

you us Thank once today. for again joining

If you at please Yatsen Piacente have Communications. feel or any questions, us Financial other contact free directly further to

Our you. found Have press both in today's be company great U.S. in can information China IR for the Thank day. and release. a

Operator

now The conference you Thank has you. for Thank today's attending concluded. presentation.

You may disconnect. now

Yatsen Holding Limited (YSG) 21 Nov 232023 Q3 Earnings call transcript