LONDON — Yatsen Holding Ltd., the parent company of cosmetics and skin care brands Perfect Diary, Little Ondine, Abby’s Choice and Galénic, on Thursday posted its first quarterly results after its initial public offering.
In the quarter ended Dec. 31, net revenue increased 71.7 percent to 1.96 billion renminbi, or $300.6 million at current exchange, year-over-year. Gross profit grew 81.6 percent to 1.30 billion renminbi, or $199.4 million, and gross margin was 66.3 percent, an improvement from 62.7 percent a year ago.
The operating loss for the fourth quarter was 1.53 billion renminbi, or $235.1 million, compared to operating profit of 71.5 million renminbi for the fourth quarter of 2019. Net loss for the period was 1.53 billion renminbi, or $234.7 million, compared to net income of 46.2 million renminbi a year ago.
The company’s income turning negative in the quarter largely because of a surge in operating expenses. As a percentage of total net revenues, total operating expenses for the fourth quarter were 144.5 percent, compared to 56.5 percent for the same period in 2019.
The number of direct customers in the period grew by 30.9 percent to 14.4 million for the Guangzhou-based company.
Total net revenues for the full year of 2020 increased by 72.6 percent to 5.23 billion renminbi, or $802 million, from 3.03 billion renminbi a year prior. Gross profit increased by 74.5 percent to 3.36 billion renminbi, or $515.6 million, and gross margin was 64.3 percent compared to 63.6 percent in 2019.
The operating loss for the full year of 2020 was 2.68 billion renminbi, or $411.1 million, compared to operating income of 143.8 million renminbi in 2019. The net loss for the period was 2.69 billion renminbi, or $412.0 million, compared to net income of 75.4 million renminbi in the prior year.
Yatsen predicts that for the first quarter of 2021 its total net revenues will be between 1.37 billion and 1.42 billion renminbi, representing year-over-year growth rate of about 35 to 40 percent.
Jinfeng Huang, founder, chairman, and chief executive officer of Yatsen, attributed the growth to the “growing popularity of homegrown Chinese beauty brands.” Its flagship Perfect Diary was the bestselling cosmetic brand during last year’s Tmall Singles’ Day shopping festival.
“With our acquisition of several distinct skin care brands and our partnership with Sensient Technologies, we are on track to offer our customers a full suite of products. While we continue to focus on innovation and quality, our efforts in expanding our offline experience stores will create even greater value for our customers and spur stronger brand engagement and loyalty,” he said.
As reported by WWD, Yatsen has been actively expanding its offerings since going public. Last week, it revealed plans to acquire skin care brand Eve Lom from Manzanita Capital, and it is launching Pink Bear, a new and more affordable cosmetics brand for China’s younger audience, on March 16.