Yatsen Reports Q2 Revenue Growth Amid Skincare Strength and Color Cosmetics Decline
Yatsen Holding Limited (NYSE: YSG) reported a 5.1% year-over-year revenue increase in the second quarter of 2026, reaching RMB1.14 billion. The growth was driven by strong performance from its skincare brands, which saw a 40.4% rise and accounted for 71.5% of total revenue. However, this was partially offset by a sharp decline in color cosmetics sales due to portfolio optimization efforts. Despite the top-line growth, profitability weakened significantly as gross margin dropped to 73.9%, down from 78.3%. This decrease was attributed mainly to inventory provisions related to SKU reductions and brand rationalization within its color cosmetics segment. Additionally, higher marketing expenses led to a net loss of RMB90.8 million for the quarter compared to a smaller loss of RMB19.5 million in the same period last year. Yatsen plans to improve profitability by expanding into new channels such as business-to-business sales and offline retail while maintaining its presence on Tmall and Douyin. The company also forecasted third-quarter revenue between RMB898.6 million and RMB998.4 million, suggesting a potential flat or slight decline compared to the prior year.
Topics: beauty cosmetics profitability skincare