FAST NEWS: Goodwill impairment drags down Yatsen’s quarterly profit

The Latest: Yatsen Holding Ltd. (YSG.US) on Wednesday reported its revenue grew 6.7% year-on-year to 1.07 billion yuan ($149 million) in the fourth quarter. But its quarterly loss also expanded to 495 million yuan, mainly due to goodwill impairment.

Looking Up: The company’s gross profit margin increased by 2.6 percentage points year-on-year to 73.7% in the fourth quarter, and its full-year gross margin rose by nearly 6 percentage points to 73.6%.

Take note: Yatsen’s full-year revenue fell 7.9% to 3.41 billion yuan, while its annual loss narrowed 8.6% to 720 million yuan.

Digging Deeper: Founded in 2016, Yatsen is a cosmetics seller that listed on the New York Stock Exchange in 2020. Its main brand is the popular Perfect Diary. Revenue from skincare, which accounts for more than half of the company’s business, grew 17.6% to 550 million yuan in the fourth quarter. The company expects to report revenue in this year’s first quarter of between 765 million yuan and 804 million yuan, up about 5% year-on-year.

Market Reaction: Yatsen shares opened up 10% in Wednesday trade, but later gave back the gains and more and ended the day down nearly 8% at $0.55, a 52-week low.

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