Yatsen Holding (YSG) Misses Q1 EPS by 2c, Revenues Beat

Yatsen Holding (NYSE: YSG) reported Q1 EPS of ($0.06), $0.02 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $220.5 million versus the consensus estimate of $215.27 million.

First Quarter 2021 Highlights

• Total net revenues for the first quarter of 2021 increased 42.7% to RMB1.44 billion (US$220.5 million) from RMB1.01 billion for the first quarter of 2020.
• Gross margin for the first quarter of 2021 was 68.6% compared to 61.7% for the first quarter of 2020.
• Gross sales[1] for the first quarter of 2021 increased 47.0% to RMB1.69 billion (US$257.3 million) from RMB1.15 billion for the first quarter of 2020.
• The number of Direct-to-Consumer ("DTC") customers[2] for the first quarter of 2021 increased 11.6% to 9.6 million from 8.6 million for the first quarter of 2020.
• Average net revenue per DTC customer[3] for the first quarter of 2021 increased 24.5% to RMB122.9 from RMB98.7 for the first quarter of 2020.

Mr. Jinfeng Huang, founder, Chairman and Chief Executive Officer of Yatsen, said, "The year is off to a good start with robust topline growth and continued execution of our multi-brand strategy. Growth in the quarter was driven by stellar performance of our flagship Perfect Diary brand as well as robust growth from Little Ondine, Abby's Choice and other brands under Yatsen's portfolio. We are especially pleased to see increases in revenue per DTC user and gross margin driven by brand premiumization and disciplined pricing and discounts policies.

"The launch of our mass market cosmetics brand Pink Bear as well as the acquisition of Eve Lom and DR.WU's mainland China business this quarter propelled our brand portfolio expansion. While we are still in early stages of integration for our newly acquired brands, we already saw signs of success with the relaunch of certain hero products within the Galénic and DR.WU portfolio. Building on our momentum in the first quarter, we will continue to leverage our current unique window of opportunity to identify valuable brands and businesses to further enrich our portfolio and invest in critical research and development and infrastructure capabilities to sustain our competitive advantage over the long term."

Mr. Donghao Yang, Chief Financial Officer and Director of Yatsen, commented, "We have had a solid start to the year, with total net revenues exceeding our guidance to reach RMB1.44 billion, a 42.7% year-over-year increase. As our top line expands, our gross margin also improved to 68.6% compared to 61.7% in the same period last year. We believe our leading market position and stellar operating performance position us well to achieve our strategic objectives this year and further capture the growth potential of China's beauty market."

Business Outlook

For the second quarter of 2021, the Company expects its total net revenues to be between RMB1.49 billion and RMB1.54 billion, representing a year-over-year growth rate of approximately 50% to 55%. These forecasts reflect the Company's current and preliminary views on the market and operational conditions, which are subject to change.

For earnings history and earnings-related data on Yatsen Holding (YSG) click here.

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