Yatsen Holding Ltd. (YSG.US) on Wednesday reported its revenue rose 5.1% year-on-year in the second quarter to 1.14 billion yuan ($170 million), as strong double-digit gains for its skincare products offset a sharp decline for its color cosmetics.
The company, which operates the Perfect Diary chain of stores in China, said sales of its skincare products jumped 40.4% to 816 million yuan in the three months to June, rising to 71.5% of total revenue from 53.5% a year earlier. But its color cosmetics sales fell 35.8% year-on-year, as it blamed heightened competition.
Despite the revenue gain, the company’s operating loss more than doubled on heavy marketing spending, which rose to 70.7% of revenue in the second quarter from 66.5% a year earlier. As that happened, the company’s net loss for the latest quarter also widened to 90.8 million yuan from a 19.5 million yuan loss a year earlier.
The company said it expects its revenue to fall between 0% and 10% year-on-year in the third quarter.
Yatsen’s shares fell 4.9% on Wednesday in New York after the announcement. The stock is down about 36% this year.
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