Yatsen Holding(US:YSG)2024-05-22 13:10Financial Data and Key Metrics Changes - Total net revenues for Q1 2024 were RMB773.4 million, a 1% increase year-over-year from RMB765.4 million [13][14] - Gross profit increased by 5.7% to RMB600.9 million, with gross margin improving to 77.7% from 74.3% [14][9] - Net loss for Q1 2024 was RMB124.9 million, compared to net income of RMB50.7 million in the prior-year period, resulting in a net loss margin of 16.1% [18][9] - Non-GAAP net loss was RMB83.8 million, with a non-GAAP net loss margin of 10.8%, compared to 3.4% in the prior-year period [18][9] Business Line Data and Key Metrics Changes - Revenues from Color Cosmetics Brands increased by 3.2% year-over-year, indicating progress in brand repositioning [8] - Skincare Brands revenues saw a slight increase of 0.1% year-over-year, while combined revenues from clinical and premium Skincare Brands rose by 6.4% [8] Market Data and Key Metrics Changes - The beauty industry in China grew moderately, with total beauty retail sales increasing by 3.3% year-over-year [6][7] - Online sales trends were mixed, with Douyin experiencing double-digit growth while Tmall sales remained flat [7] Company Strategy and Development Direction - The company aims to strengthen its market position through superior products and strong brand equity while optimizing its long-term cost structure [7] - The management is focused on sustainable growth and brand building as part of its five-year strategic transformation plan [7][10] Management Comments on Operating Environment and Future Outlook - Management noted that major online shopping festivals are becoming less influential for sales growth, but efforts will continue to maximize sales during these events [23] - For Q2 2024, the company expects total net revenues to be between RMB858.6 million and RMB901.5 million, reflecting a year-over-year increase of approximately 0% to 5% [19][20] Other Important Information - Total operating expenses increased by 31.7% to RMB758.7 million, with selling and marketing expenses rising to 69.7% of total net revenues [14][15] - R&D expenses as a percentage of revenues increased to 3.6% from 3.2% year-over-year, reflecting a commitment to enhancing research capabilities [12][17] Q&A Session Summary Question: Strategy for the June 18 Shopping Festival and target growth rates for Skincare and Color Cosmetics - Management indicated that the influence of shopping festivals is declining, making it difficult to predict performance for the upcoming festival [23] - No specific growth rate forecasts were provided for Skincare and Color Cosmetics, aside from Q2 revenue guidance [24] Question: Allocation of selling and marketing expenses between branding and online traffic acquisition - The allocation depends on the performance of new product launches, with management aiming to control and optimize selling and marketing expenses [24]