#China #Guangzhou #financial results #Yatsen #Skincare Brands

Yatsen Holding Reports Strong Q3 2025 Financial Performance

Yatsen Holding Limited (NYSE: YSG), a premier beauty company based in China, has presented its financial records for the third quarter ended September 30, 2025. The report highlights robust growth, with total net revenues rising by an impressive 47.5%, reaching RMB998.4 million (approximately USD140.2 million). This substantial uptick is attributed chiefly to an 83.2% surge in revenues from skincare brands, now making up nearly half of the company’s overall income.

Growth Across Categories

The skincare sector's revenues for the quarter significantly grew, amounting to RMB490.8 million (USD68.9 million), showcasing the brand’s strength in this competitive market. The overall revenue contribution from skincare climbed from 39.6% in the previous year to 49.2% this quarter, underscoring consumer preference for these products during the period. Meanwhile, revenue from color cosmetics brands also saw a commendable year-over-year increase of 25.2%, indicating a broader trend of heightened consumer demand for beauty products in China.

Gross Margin and Net Loss Reduction

Yatsen's gross margin also experienced a positive shift, rising from 75.9% to 78.2%. The company was able to attain this through efficient sales of higher-margin products and improved operational performance. Notably, the net loss for Q3 2025 decreased significantly by 41.9%, narrowing down to RMB70.4 million (USD9.9 million) compared to RMB121.1 million in the same quarter of the previous year. Non-GAAP net loss figures reflected a similar trend, dropping to RMB51.5 million (USD7.2 million) from the earlier RMB76.6 million.

Management Insights

Mr. Jinfeng Huang, the Founder and CEO of Yatsen, attributed this success to their focused strategy of creating a resilient brand portfolio. He mentioned that the company’s skincare brands are outperforming market trends, benefiting from continuous product innovations such as DR.WU's PDRN Serum and Galénic's No.3 VB Serum. He expressed confidence in the company’s product pipeline, which is expected to thrive during the upcoming shopping festivals.

Chief Financial Officer Mr. Donghao Yang echoed Mr. Huang’s sentiments, noting that their revenue growth surpassed previous expectations despite significant investments in hero product launches and preparations for the major Double 11 shopping festival. His remarks highlighted ongoing efforts to optimize costs, leading to notable reductions in loss margins.

Operating Expenses and Future Outlook

Operating expenses for the quarter rose by 31.9% year-over-year, reaching RMB864.1 million (USD121.4 million). However, the company successfully enhanced its operating efficiency, seeing total operating expenses as a percentage of total net revenue drop to 86.5% from 96.8% year-over-year. Noteworthy is the decline in fulfillment and selling expenses as a percentage of total revenues due to higher sales volumes, which speaks to Yatsen’s improved operational dynamics.

Looking ahead to Q4 2025, Yatsen anticipates total net revenues between RMB1.32 billion and RMB1.49 billion, signaling continued growth momentum of approximately 15% to 30% year-over-year. These forecasts are preliminary and reflect ongoing market conditions that Yatsen is navigating diligently.

Conclusion

In summary, Yatsen Holding's Q3 2025 financial performance underscores a resounding success on multiple fronts from robust revenue growth driven primarily by skincare brands to significantly reduced net losses. As the company gears up for the major Double 11 shopping festival, its strategic focus on innovation and operational efficiency positions it favorably within the beauty sector. Investors and consumers alike will be watching closely to see how Yatsen continues to evolve within the dynamic beauty landscape.