Yatsen Holding Limited (NYSE: YSG) saw its stock price plummet 5.14% in pre-market trading on Monday following the release of its third quarter 2025 financial results. The China-based beauty group reported a net loss of RMB70.4 million (US$9.9 million) for the quarter, despite a 47.5% year-over-year increase in total net revenues to RMB998.4 million (US$140.2 million).
While Yatsen's gross margin improved to 78.2% from 75.9% in the prior year period, and the company narrowed its losses compared to Q3 2024, investors seem concerned about the continued lack of profitability. The company's non-GAAP net loss for the third quarter was RMB51.5 million (US$7.2 million), an improvement from RMB76.6 million in the same period last year, but still in negative territory.
Adding to investor worries, Yatsen provided fourth quarter 2025 revenue guidance of RMB1.32 billion to RMB1.49 billion, representing a year-over-year increase of approximately 15% to 30%. This outlook, while showing continued growth, may have fallen short of market expectations, contributing to the sharp stock decline. The company's ability to achieve profitability while maintaining its growth trajectory remains a key focus for investors.
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