What’s new: Chinese beauty company Yatsen Holding Ltd., best known for its budget cosmetics brand Perfect Diary, has reported its ever first drop in quarterly revenue.
For the fourth quarter of 2021, New York-listed Yatsen saw its revenue fall 22.1% year-on-year to 1.53 billion yuan ($242 million), though its net losses narrowed 69% to 475 million yuan, according to financial results published Thursday.
The fourth quarter was “marked by soft consumer demand and intense competition in the color cosmetics segment,” said Jinfeng Huang, the founder, chairman, and CEO of the Guangzhou-based company. However, the company saw better sales in its newly acquired and launched skincare brands, Huang said.
Color cosmetics include makeup products such as mascara, foundation and lipstick.
The shrinking loss was mainly due to a fall in general and administrative expenses, which were cut by nearly 80% year-on-year.
For the whole of 2021, Yatsen had 5.8 billion yuan in revenue, up 12%, and posted a 1.5 billion yuan net loss, down by over two-fifths.
Background: In the wake of the results, Yatsen shares plunged 39.5% to $0.77, the first time they’ve fallen below $1 since the company’s late 2020 IPO. Its shares are down almost 97% since peaking last February.
While Perfect Diary was the best-selling cosmetics brand on Alibaba’s Tmall e-commerce platform on 2019 and 2020’s Double 11 shopping bonanza, it fell to fourth in 2021. Another well-known Chinese cosmetics brand, Hua Xizi (“花西子”), fell to fifth, compared to second place the year before. The top two spots were taken up by Yves Saint Laurent and Estée Lauder, respectively.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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