YSG - Earnings call transcript Q1 2024

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Operator

Ladies and gentlemen, good day, and welcome to the Yatsen First Quarter 2024 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 Investment 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

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

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

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

reminder, is recorded. a being As conference this

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

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

Jinfeng Huang

industry while National retail of data a start beauty of year-over-year retail increased the consumer across in brands. XXXX. providing grew sales for X.X% and beauty continues Thank will have Statistics the by First of published first made by Quarter sales of overview the Yatsen's by our to you, According in XXXX, total by Earnings quarter quarter the first moderately in and year-over-year. everyone, group total our XXXX Call X.X% of China, adjusted Bureau Irene, participating the thank to the we I and Conference today. before China's progress you, segments strategy macro reviewing grow

the Douyin on double-digit recorded sales sales remains growth, beauty while Tmall mixed, remain quarter. trends on year-over-year in of another sales Online first year-over-year quarter flat largely

While industry, to is quarter. the started a the season low managed that growth still last the category beauty first maintain transitionally quarter in we

As superior our while brand strong our market and across our focuses, our to structure. we plan plan strengthen rapidly through products X-year position strategy optimizing cost equity long-term transformation brands

Bear premium For year-over-year. Pink the our first increased year-over-year. with Combined brands, net line RMB positioning rose improved from continued X% guidance. clinical our X.X% margin X.X% in year and in brand Galénic, Eve from period. Bear. Diary's were as quarter, Color progress revenues Net revenues total increased brands prior Pink million, XXX.X as revenues Brand's Cosmetics by from year-over-year, well of XX.X% Lom Little and for year-over-year, Gross indicating Perfect the growth XX.X% revenues and X.X% growing Ondine skin to care DR.WU

we Hence, increased higher had products. from contribution gross margin

to executive Our for share-based to XX.X% was recognized margin of of unvested to related reversal the the XXX.X RMB net exceptionally year with compared officers. the the margin high resulting forfeiture net of expenses granted primarily due the from of awards compensation loss base prior million former period, income X.X%

channel Our margin in contribution X.X% a investment marketing prior activities loss increased compared growing the year in attributable shift period, Douyin. XX.X% non-GAAP from with net for to our and with was mix the

product and update. Next, brand a

launched fourth cream. Products essence China International the April, rejuvenating its building in the in festival events and the Lom preparation Galénic segment, and its June presented results Consumer the Expo products their skincare launched where shopping and the product and quarter for in The XX Lom Couture Secret R&D launches initiatives our Eve second latest Galénic quarter. at d'Excellence. our For Eve first brand include daily

brands Color the category the Biolip this brand good and including Essence the launched potential. also sales its quarter Furthermore, March lipstick lipstick Tmall lotion. new retail Diary #X collections Cosmetics ranked first in performance Matte to segment, continues its Suncare launched among The Perfect for tri-retinoid anti-wrinkle serum This several firming the UV-protect a in terms products, Biolip In DR.WU realize whitening year value listed of during delivered shopping on and earlier XXXX. combined the X of festival. Douyin the Essence

at a major trend. ground year. Sugar during quarter Ondine Awards Glossy Bear, brands, was Lipstick the its of Our Little other Pink X the Cosmetics as newcomer Bear and solid launched Color and Pink remains honored the the BeautyInc on

pursue change Little both color growth ahead, Pink to [indiscernible] pattern. and to sustainable Ondine we and Bear, explore new Looking will continue

Next R&D.

percentage expenses prior as year X.X% period. the increased from to revenue of a R&D Our X.X% for

annual begin first the continue the and the boundaries soliciting Galénic topics dermatologists first and research global push announced research summit March, from latest Renowned new in officially gathered acne Fund present Dermatology discuss recently the to DR.WU Fund's Research final France. in project experts Research the Skincare in for to of XXXX. around afar, We half Also, launch project the in hosting DR.WU review. the we'll Acne and of research second

our were everyone. growth we discuss brand and on turn Donghao trend now quarter, In that, this pleased Thank the growth and Yang, maintain financial building we as to I our sustainable will conclusion, you, focused call our over performance. move ahead. CFO, to we'll stay to With

Donghao Yang

David, you, and Thank hello, everyone.

RMB attributable clarify to in X.X% cosmetics Total increase first year-over-year color noted. million, RMB million in presented the from get are XXXX like net revenues financial and today with XX.X% was XXXX XXX.X of increased for brands. Gross increase a period. XX.X% RMB prior amounts quarter year increased RMB million higher unless would prior to an RMB XXXX expenses revenues of changes year from net prior I from operating margin quarter combined for first RMB a skincare sales the increased to the million net RMB X.X% from XXX.X million by started, period. revenues by XXXX increase gross for XXX.X in first prior year that increased the X.X% was plant to from period. for The XXX.X Total numbers otherwise quarter for for products. XX.X% of profit in year-over-year to the for to refers X% I margin XXX.X Gross the year-over-year all primarily primarily from by year changes the by for increase period. quarter the million all of The of first XXX.X Before driven percentage increase to

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

of the revenue, from of quarter decreased for net expenses percentage prior total X.X% XXXX the fulfillment a period. As for year fourth X.X% to

of RMB XXXX XXX XXX.X marketing expenses million million with the year prior RMB and first compared for as Selling quarter period. for were the

the portfolio. line to increased from investments in for of As year contribution marketing as Douyin the in revenue XXXX Douyin from across our brand XX.X% launches increased first due The a well the percentage growing investment period. in equity prior quarter selling of to our as XX% increase with and product total expenses the and net platform revenues, building to primarily was new

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

XXXX percentage year was with for XX.X% general period. the quarter revenues, expenses increased attributable of from expenses to and total exceptionally primarily prior net a general administrative The increase to recognized and administrative the for former unvested the to resignation. in Chief of As X.X% period reported a of of low the of forfeiture result year our the of prior XXX.X granted awards expenses as RMB reversal Officer compensation share-based his Technology upon million due first

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

expenses the to revenues, X.X% first quarter of research X.X% and As total of the from increased for prior a year development percentage net for period. XXXX

for year XXXX the first as million RMB loss our personnel prior Operating year was commitment with loss the primarily margin X.X% quarter for prior was reflecting of operations quarter and X.X year capabilities. increase costs from with first period. the compared Loss XX.X% as enhancing for higher Non-GAAP for for million was XX.X as attributable the XXXX was research development million from period. RMB period. the RMB The with RMB XXX.X operations of our prior compared million to to compared XXX

X.XX as for net the ordinary ADS first RMB period. RMB XX.X% of the RMB prior XXX.X for was margin for year Yatsen's prior as of income year prior XX.X%, period. first with diluted was Non-GAAP for quarter Non-GAAP with XX.X% shareholders loss X.X% Net for to Yatsen's XXXX the prior loss for to ordinary for RMB diluted compared the with X.X% year was Net attributable compared net as net income compared loss XX.X shareholders the year with million with of first to quarter net net with loss as XX.X was ADS period. the X.XX diluted for for compared income year loss RMB period. Net ADS quarter of for XXXX for compared year period. Non-GAAP margin compared to was the prior period. as prior margin X.X% was attributable period. of X.XX X.XX for XXXX loss margin million RMB net as was the with million of Yatsen's of compared shareholders operating loss million first the quarter as ordinary Non-GAAP XXXX the the XX.X attributable year RMB RMB prior for

XX, RMB XXXX. Net period. first billion the RMB full-term year with As X.XX for of million in restricted and X.XX XXXX had the RMB prior XXX.X XXXX, of we as billion December investments as cash was used of million compared March as cash with activities operating cash, XX.X of compared for quarter RMB XX,

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

Operator

The from comes with Maggie CICC. Huang [Operator first today Instructions] question

Maggie Luyao Huang

have XXth growth first and a strategy Maggie my first festival. That's for Color shopping This about Cosmetics And also coming question. X is our Huang Skincare is our we My the CICC. package June respectively, have for also, brands. from I questions. do question rate,

our investment our QX. question And building brand management my ratio. second in equity we selling in The that increased and had is mentioned marketing regarding expenses

what between how acquisition. That's our X So this of should the allocate questions. online and plan the for expect ratio such change is you. expense we expenses branding kind year? our of whole Thank traffic And to my

Donghao Yang

your for you Thank questions.

festivals shopping your has manufacturers festivals our or down. Brand come in terms or on less answer relying X China, first in to us gradually owners years, one. the online influence Well, major -- the and shopping are less try in those me festivals last growth. Let of shopping sales X their like

that previous a festival of said, different efforts still try those we're our sell to actually, festivals. And to this years. bit the from making the it's But more during product a X/XX year,

So on previous it's this year, the festival May a going to lot but last years. longer than the started XX,

ourselves and also the Skincare the hard of Cosmetics. performance quarter. that. will us tell our asked this for And you time for for going the sales about So guidance the kind providing we're forecast forecast to us able more Unfortunately, be on growth what not our rate for that except some growth for it's second to festival take so tell to year to be. It's Color

product on branding how marketing depends question, And it performed. selling our, second launch between Well, are expenses split your and our new really and actually traffic.

are So And measures were we're become previous as it compared to selling and to marketing make to selling you make that take sure in the control down quarters. use and try midterm. in currently better our the bit profitable see, our actually expenses. near and expenses QX can we a would higher we trying of to to to taking And marketing or

Operator

like I to concludes turn any This over back for our would conference closing to the question-and-answer management session. remarks.

Irene Lyu

joining you today. Thank again once for us

PFC. please feel any If Yatsen to contact you have free directly further at questions, or us at

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

Operator

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

You disconnect. may now

Yatsen Holding Limited (YSG) 22 May 242024 Q1 Earnings call transcript