Yatsen Holding Limited (NYSE:YSG) Q1 2022 Results Conference Call May 24, 2022 7:30 AM ET

Company Participants

Irene Lyu - Head, Strategic Investment and Capital Markets

Jinfeng Huang - Founder, Chairman and CEO

Donghao Yang - Director and CFO

Conference Call Participants

Dustin Wei - Morgan Stanley

Christine Cho - Goldman Sachs

Devin Weinstein - Raymond James

Operator

Ladies and gentlemen, good day, and welcome to the Yatsen First Quarter 2022 Earnings Conference Call. Today’s conference call is being recorded.

At this time, I would like to turn the conference over to Irene Lyu, Head of Strategic Investment and Capital Markets. Please go ahead.

Irene Lyu

Thank you, operator. Please note that the discussion today will contain forward-looking statements relating to the company’s future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance nor are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company’s control and could cause actual results to differ materially from those mentioned in today’s press release and this discussion. A general discussion of the risk factors that could affect Yatsen’s business and financial results is included in certain filings with the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law.

During today’s call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

Joining us today on the call from Yatsen’s senior management team are Mr. Jinfeng Huang, our Founder, Chairman and CEO; and also Mr. Donghao Yang, our Director and CFO. Management will begin with prepared remarks, and the call will conclude with a Q&A session.

As a reminder: This conference call is being recorded, and a webcast replay will be available on Yatsen’s investor relations website at ir.yatsenglobal.com.

I will now turn the call over to Mr. Jinfeng Huang. Please go ahead, David.

Jinfeng Huang

Thank you, Ari, and thank you, everyone, for participating in Yatsen’s conference call for the first quarter of 2022.

The first quarter of 2022 was a challenging one for Yatsen and the entire beauty industry. According to the China National Bureau of Statistics, beauty retail spending grew by 1.8% in the first quarter, one of its lowest growth rates since the pandemic recovery from the second quarter of 2020, due to weak consumer spending and the economy uncertainties in China. The resurgence of COVID-19 in March led to widespread restrictions in major Chinese cities such as Shanghai. And with the restrictions continuing well into the second quarter, it is clear that we are facing one of the toughest business environments in recent years. Against this market backdrop, our potential net revenues in the first quarter declined by 38.3% year-over-year to RMB 891 million, in line with our previous guidance.