Yatsen Returns to Growth in Q1 as Skincare Surges 48%

Yatsen, the parent company of Perfect Diary, is showing signs of a rebound. In its Q1 2025 results, the Chinese beauty group reported revenue of RMB 834 million, up 7.8% year-on-year—beating expectations and marking its second straight quarter of growth.

Gross profit rose nearly 10% as the company leaned into high-margin products, pushing gross margin to 79.1%. Meanwhile, net losses narrowed sharply to just RMB 5.6 million from RMB 125 million a year ago, aided by reduced management costs and accounting adjustments. On a non-GAAP basis, Yatsen posted a profit of RMB 7.14 million.

Behind the numbers, a clear strategic pivot is underway. CEO Jinfeng Huang emphasized the brand’s shift from marketing-led growth to a product-first approach, highlighting increased investment in R&D and brand development. CFO Donghao Yang added that the return to positive cash flow and narrowing losses reflect improved cost controls and healthier business fundamentals.

The company’s biggest win this quarter came from skincare, where sales jumped 47.7% to RMB 362 million, now accounting for 43.5% of total revenue. Hero brands Galénic, DR.WU, and EVE LOM posted a combined YoY growth of 58%, with EVE LOM’s new offline retail format in South China outperforming expectations—achieving 300% of its first-month KPI. The results validate the brand’s potential in luxury skincare retail and signal strong traction in the high-efficacy segment.

By contrast, color cosmetics remained in recovery mode, with revenue down 9.9% year-on-year to RMB 471 million. Perfect Diary is undergoing a major repositioning, introducing hybrid “makeup-skincare” products.

Still, younger labels are offering reasons for optimism. Little Ondine sold over 600,000 eyeliner on Tmall, while Pink Bear cracked the top four in Douyin’s lip color category. These rising stars are helping to offset declines in the flagship brand and validating Yatsen’s multi-brand playbook.

Looking ahead, Yatsen expects Q2 revenue to land between RMB 810 million and 890 million, reflecting anticipated growth of 2% to 12%.