Q1 2024 Yatsen Holding Ltd Earnings Call
Ladies and gentlemen, good day and welcome the yachts in first quarter 'twenty 'twenty four earnings conference call.
Operator: Ladies and gentlemen, good day and welcome to the Yatsen First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.
Today's conference is being recorded.
Speaker Change: At this time I would like to turn the conference over to Irene <unk>, Vice President head of strategic investment and capital markets. Please go ahead.
Speaker Change: Okay.
Irene Lyu: Thank you, Operator. Please note that the discussion today will contain four local statements relating to the company's future performance and our intention to qualify for the Safe Harbor from Liability, as established by the U.S. Private Security Mitigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainty, 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.
Speaker Change: Thank you operator, do you feel that the scaffold to say walk before.
Speaker Change: Oh, Yeah. They go for a couple of course the follows 900 will qualify for the safe Harbor from liability.
Speaker Change: Established by the U S Private Securities Litigation Reform Act.
Speaker Change: They're spending or.
Speaker Change: We're not scared to yourself you spoke of falloff and are subject to FERC.
Speaker Change: Oh subtlety that's all.
Speaker Change: And other factors some of these are.
Speaker Change: Yeah, a couple fault Oh click.
Speaker Change: Cause actual result to differ materially from those small singles day almost.
Speaker Change: Got it.
Irene Lyu: A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. However, 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. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.
Speaker Change: General discussion of the risk factors that could affect yaacov is also financially. It's all yes I'll call. It will start from fighting for the company with the Securities Commission.
Speaker Change: Our mission.
Speaker Change: Company does not undertake any obligation to update this forward looking information except as required by law.
Speaker Change: During today's call management will also discuss certain non-GAAP financial measures for comparison purposes.
Speaker Change: Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial they bought.
Irene Lyu: Joining us today on the call from Yatsen Senior Management are Mr. Jinfeng Huang, our Founder, Chairman, and CEO, and Mr. Donghao Yang, our CFO and Director. 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. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I will now turn the call over to Mr. Jinfeng Huang, Chief of Staff.
Speaker Change: So what else today on the call from Yahoo, Senior management arm.
Speaker Change: Mr. Gopal follows our founder Chairman and CEO, Mr. Don Yang, our CFO and director Nancy I will begin with prepared remarks, and the call will conclude with a Q&A session.
Speaker Change: As a reminder, this conference is sort of recorded in addition, a webcast replay of this conference call will be available on Yahoo, Investor Relations website at IR about Yahoo Global desktop.
Speaker Change: I'll now turn the call over to Mr Football before.
Jinfeng Huang: Thank you, Irene, and thank you everyone for participating. Yatsen's 1st Quarter 2024 Earnings Conference Call To gather, I will start by providing a macro overview before reviewing our strategy and the progress we have made across our segment and breadth. China's beauty industry continues to grow moderately in the first quarter of 2024, according to the adjusted data published by the National Bureau of Statistics of China. Total retail sales of consumer goods grew by 4.7% year-over-year in the first quarter of 2024, while total beauty retail sales increased by 3.3% year-over-year.
Speaker Change: Thank you Irene and thank you everyone for facing food definitely first quarter 17.
Speaker Change: Earnings Conference call today.
Speaker Change: Okay, Spotify for Whiting with Mako overview before reviewing our strategy and the progress we have made across our second one Brett.
Speaker Change: How does the beauty industry continues to grow moderately in the first quarter of 'twenty 'twenty four.
Speaker Change: According to the fastest to stave off population.
Speaker Change: National Bureau of statistics the firewall.
Speaker Change: Total retail sales of consumer group grew by four 7% year over year in the first quarter often has done before.
Speaker Change: While total beauty retail sales increased by three 3% year over year.
Speaker Change: Our lifestyles can remain for me.
Jinfeng Huang: Online sales trend remains mixed. Beauty sales on Shouyin recorded another quarter of double-digit year-over-year growth, while sales on Tmall remained largely flat year-over-year in the first quarter. While the first quarter is traditionally a low season in the beauty industry, we still managed to maintain the growth trajectory that started last quarter. As our five-year strategy transformation plan progresses, we plan to strengthen our market position through superior products and strong brand equity across our brands while gradually optimizing our long-term cost structure. For the first quarter, total net revenues were RMB773.4 million, growing 1% year-over-year, in line with guidance.
Speaker Change: Cellphone bogey recorded another quarter of double digit year over year growth while sales on tmall.
Speaker Change: Lots of be less year over year first quarter.
Speaker Change: While the first quarter is conditioned on the low season in the P. T. C. C. You still manage to maintain the growth categories. Thus far this last quarter.
It's all a five year strategy for me some flame poker.
Speaker Change: We plan to strengthen our market position.
Speaker Change: Product and strong brand equity across all fronts, while rapidly optimizing our long term cost roughly.
Speaker Change: For the first quarter total net revenues were RMB 773 point for me there.
Speaker Change: Growing 1% year over year.
Speaker Change: In line with guidance.
Speaker Change: Net revenue for all the color cosmetics brands increased three 2% year over year.
Jinfeng Huang: Net revenues from our color cosmetics brand increased 3.2% year over year, indicating progress in the Pervadiris brand repositioning as well as continued growth of little onting and fingers. The skincare brand's revenues increased by 0.1% year-over-year. Combined revenues from our clinical and premium skincare brands that are linked to Dr. Wu and Yif Long rose 6.4% year-over-year. Growth Margin improved to 77.7% from 7.4% and 74.3% for the prior year, too, thanks to an increased contribution from higher-growth modern products. [inaudible] 15.1%, compared with the net income margin of 6.6% for the prior year period. I'm really due to the exceptionally high base resulting from this.
Speaker Change: Indicating progress in full the batteries Brendan positioning as well as continued growth of at least the one thing and it seems it.
Speaker Change: Thank you, Brian as revenues increased by four 1% year over year.
Speaker Change: Combined revenue for all of our clinical and a premium skincare right.
Speaker Change: He's also a pool and.
Speaker Change: If long rose six 4% year over year.
Speaker Change: Gross margin improved to 77.
Speaker Change: One 7% from seven four.
Speaker Change: 74, 3% for the prior year period.
Speaker Change: Thankfully and increased contribution from our higher gross margin positive.
Speaker Change: On that last Muslim award.
Speaker Change: 15, 1%.
Compared with the net income margin.
Speaker Change: One 6% for the prior year period.
I'm really due to the exceptionally high base, resulting from the <unk>.
Jinfeng Huang: The reversal of recognized share-based compensation expenses of RMB 109.4 million related to the forfeit of the unvaccinated award. Our Nong Keap Nalue, Modern War, 10.8% compared with 3.4% for the prior year period, are suitable to increase investment in marketing activities and a shift in our channel mix with a growing contribution from Douyu. Next, a brand and product update. For our senior segment, our first quarter initiative includes brand building events and product launches in preparation for the June 18 Shopping Festival in the second quarter.
Speaker Change: Reversal of recognized share based compensation expenses.
Speaker Change: On the one gig and the main point for media related to the corporate.
<unk> Award.
Speaker Change: Granted for a former executive officer.
Speaker Change: Our non-GAAP net lose Martin worth somewhat episodic.
Speaker Change: Compared with two 4% for the prior year period.
Speaker Change: Attributable to increased investments in marketing activities.
Speaker Change: Shift in our economy.
Speaker Change: The growing contribution from the Oems.
Speaker Change: Les a friend and partner updates.
Speaker Change: Oh. Thank you secondly, I'll first quarter elicited includes Robin.
Speaker Change: Where I'm fielding events and product launches.
Duration for the June 18th shopping festival in the second quarter.
Speaker Change: Well any in Islam presented their latest filings.
Jinfeng Huang: Selene and Yif Long presented their latest R&D results and products at the 4th China International Consumer Products Expo in April, where PLANET launched its KOTOR secret satellite. Yatsen Hldg, and Yif Long is the daily rejuvenating queen. Furthermore, Dr. Wu launched several new products, including his Truvitinol anti-wrinkle firming serum and the Suncare UV Protect whitening lotion in the color-past-matic segment. Survey Diary continues to realize its biolithic essence, collections, and potential.
Speaker Change: It is all in the product.
As the forthcoming Latino consumer product.
In April.
Speaker Change: Whereas the Atlantic launched is the coastal uptick right, that's what I said.
Speaker Change: The essence.
Speaker Change: And if long long, if bally with Duvelisib Queen.
Furthermore, we launched several new products, including as.
Speaker Change: You know MTV and confirming serving in the Sun care, you'll be for Pat Watson the lotion.
Speaker Change: [laughter].
Speaker Change: In the color cosmetic segment.
Speaker Change: So everybody continues to realize is finally essence collections potentially.
Jinfeng Huang: The brand ranked No. 2 in the Mixed Category, Amount of Mixed Brands, in terms of retail sales value on Tmall and Douyin combined for the first quarter of 2024. This Biolink Essence Matte Lipstick, launched earlier this year, also delivered a good performance during the March 8 Shopping Festival. Meanwhile, our two other major color cosmetic brands, Lisa Ondeh and Pimzir, remained on a solid ground, ten
Brian ranked number two in the lipstick category amongst almost a threat.
Speaker Change: Parents of it ourselves.
Speaker Change: On C more and that bogey combined for the first quarter of <unk> 74.
Speaker Change: And finally as a mass victory launched earlier. This year also delivered a good performance during the March eight shopping festivals.
Our two other major college of Medicine is the only other thing there remains almost totally cloud first.
Jinfeng Huang: Tim Bear launched its Sugar Glossy Lipstick during the quarter and was honored at the Beauty Inc. Award as the Newcomer of the Year. Looking ahead, both Mr. Ongdi and Mr. Pingdier will continue to explore new color trends and embrace IT to pursue a sustainable growth path. Snap Andy.
Speaker Change: Tim there long sugar closely lifted during the quarter and it was the owners at the 15th award it's a newcomer off the year.
Speaker Change: Looking ahead, both Lisa and the team here will continue to explore new pilot Charles and his team to pursue a sustainable growth path.
Speaker Change: That's M D.
Jinfeng Huang: Our R&D expenses as a percentage of revenues increased to 3.6% from 3.2% for the prior year period. We continue to push the boundaries of fire, recently hosting the first Galenic Dermatology Research Fund Annual Research Summit in France. Renowned dermatologists and experts from around the world gathered to discuss the latest research in skincare and to present the project for a panel review. Also, Dr. Wu officially announced the launch of the second Dr. Wu Acne Research Fund project in March and will begin soliciting new acne research topics in the first half of 2021.
Speaker Change: R&D expenses as a percentage of revenues increased to three 6% from.
Speaker Change: From three 2% for the prior year period.
We continue to push the boundaries of pause.
Speaker Change: The whole thing, but first allow me somewhat policy research funds and they are with their stomach in front.
Speaker Change: Renewed stomach hologic.
Speaker Change: And experts from around the global gathers what's the latest research and skincare and presents pop ups for a partner with you.
Speaker Change: Also notable officially announced the launch of the second bucket of who actually was search found deposits in March and will begin validating new acne with those in the first half of the Amazon before.
Speaker Change: In conclusion, we were pleased to maintain our growth this quarter and will stay focused on sustainable growth and as we move ahead.
Jinfeng Huang: In conclusion, we were pleased to maintain our growth trends this quarter and will stay focused on sustainable growth and brand building as we move ahead. With that, I will now turn the call over to our CFO, Donghao Yang, to discuss our financial performance. Thank you, everyone.
Speaker Change: With that I would now turn the call oversaw CFO somehow young.
Speaker Change: First our financial performance. Thank you everyone.
Speaker Change: Thank you, David and Hello, everyone before I get started I would like to clarify that all financial numbers presented today are you in Vietnam, and all percentage changes refer to year over year changes.
Donghao Yang: Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in renminbi amounts, and all percentage changes, referred to as year-over-year changes, are just otherwise noted. Total net revenues for the first quarter of 2024 increased by 1%, to 773.4 million RMB from 765.4 million RMB for the prior year period. The increase was primarily attributable to a 3.2% year-over-year increase.
Donghao Yang: Net revenue from Color Cosmetic Brands combined with 0.1% year-over-year income from Skincare Plan. Gross profit for the first quarter of 2024 increased by 5.7% to 600.9 million RMB from 568.7 million for the prior year period. Gross margin for the first quarter of 2024 increased to 77.7% from 74.3% for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products.
Speaker Change: Otherwise noted.
Speaker Change: Total net revenues for the first quarter of 2024 increased by 1%.
Speaker Change: $773 4 million RMB.
Speaker Change: $765 4 million.
Speaker Change: For the prior year period, the increase was primarily attributable to a three 6% year over year increase.
Speaker Change: Revenues from color cosmetics brand.
Speaker Change: Bind with 041 percent year over year increase in net revenues some skincare flat.
Speaker Change: Gross profit for the first quarter.
Speaker Change: 2024 increased by five 7% to $600.
Speaker Change: 9 million RMB.
Speaker Change: 500.
Speaker Change: $68 7 million for the prior year period.
Speaker Change: Gross margin for the first quarter of 2024 increased to 77, 7% from 74 Super fast for the prior year.
Speaker Change: Yes.
Speaker Change: Increase was primarily driven by an increase in sales of higher gross margin product.
Speaker Change: Total operating expenses for the third quarter of 2024 increased by 31, 7%.
Donghao Yang: Total operating expenses for the first quarter of 2024 increased by 31.7% to 758.7 million RMB from 575.9 million RMB for the prior year period. As a percentage of total net revenues, total operating expenses for the first quarter of 2024 were 98.1%, as compared with 75.2% for the prior year period. Fulfillment expenses for the first quarter of 2024 were 51.4 million RMB as compared with 61.9 million for the prior year period. The percentage of total net revenue fulfillment expenses for the first quarter of 2024 decreased to 6.7% from 6.8% for the prior year period.
Speaker Change: 758 7 million RMB.
Speaker Change: $575 9 million RMB for the prior year period.
Speaker Change: As a percentage of total net revenues total operating expenses for the first quarter of 2024 where magazine.
Speaker Change: 1%.
Speaker Change: Compared with 75, 2%.
Speaker Change: The year period.
Speaker Change: So so many sensors for the first quarter of 2024, 451, 4 million RMB as compared with $61 9 million for the prior year period.
Speaker Change: As a percentage of total net revenues fulfillment expenses for the fourth quarter of 2024 decreased to six 7%.
Speaker Change: Six 8% for the prior.
Speaker Change: A year period.
Donghao Yang: Selling and marketing expenses for the first quarter of 2024 were 539.2 million RMB, as compared with 459 million RMB for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the first quarter of 2024 increased to 69.7% from 60% for the prior year period. The increase was primarily due to increased investment in the Douyin platform in line with the growing revenue contribution from Douyin, as well as our investment in new product launches and building brand equity across our portfolio.
Speaker Change: Selling and marketing expenses for the first quarter of 2024, or a 539.2 million RMB.
Speaker Change: As compared with 459 million.
Speaker Change: Yes.
Speaker Change: For the prior year period as a percentage of total net revenues selling and marketing expenses for the first quarter of 2024 increased to 69, 7% some 60%.
Five year period.
Speaker Change: The increase was primarily due to increased investments in platform in line with the growing revenue contribution from <unk> as well as our investment in new product launches.
Speaker Change: And building brand equity across our portfolio.
Speaker Change: General and administrative expenses for the first quarter of 2024, or 141 million RMB as compared with $47 million for the prior year period.
Donghao Yang: General and Administrative expenses for the first quarter of 2024 were RMB140.1 million as compared with RMB40.7 million for the prior period. And the percentage of total... Net Revenue, General and administrative expenses for the first quarter of 2024 increased to 18.1 percent from 5.3 percent for the prior year period. The increase was primarily attributable to the exceptionally low general and administrative expenses reported in the prior year period as a result of the reversal of recognized share-based compensation expenses of RMB109.4 million due to the forfeiture of uninvested awards granted to our former Chief Technology Officer upon his resignation.
Speaker Change: As a percentage of total.
Speaker Change: Net revenues.
Oh and administrative expenses for the first quarter of 2024 increased to 18, 1% from five 3% for the prior year period.
Speaker Change: Greece was primarily attributable with exceptionally low general and administrative expenses reported in the prior year period as a result of the reversal of recognized share based compensation expenses of $109 4 million RMB future procedure.
Speaker Change: Unvested award granted to our former Chief Technology officer upon his resignation.
Speaker Change: Research and development expenses for the first quarter of 2024, or 27 9 million RMB as compared with $24 2 million for the prior year period.
Donghao Yang: Research and development expenses for the first quarter of 2024 were 27.9 million RMB as compared with 24.2 million for the tri-year period. As a percentage of total net revenues, research and development expenses for the first quarter of 2024 increased to 3.6% from 3.2% for the prior year period. The increase was primarily attributable to higher personnel costs, reflecting our commitment to enhancing our research and development capabilities.
Speaker Change: As a percentage of total net revenues research and development expenses for the first quarter of 2024 increased to three 6%.
Three 2% for the prior year period, the increase was primarily attributable to higher personnel costs.
Speaker Change: Selecting our commitment to enhancing our research and development capabilities.
Speaker Change: Loss from operations for the first quarter of 2024 was 167 7 million RMB.
Donghao Yang: Loss from operations for the first quarter of 2024 was 157.7 million RMB, as compared with 7.2 million for the tri-year period. The operating loss margin was 20.4%, as compared with 0.9% for the tri-year period. Non-GET loss from operations in the first quarter of 2024 was 107 million RMB as compared with 62.4 million for the prior year period. Non-GET operating loss margin was 13.8% as compared with 8.1% for the prior year period. The net loss for the first quarter of 2024 was 124.9 million RMB as compared with a net income of 50.7 million RMB for the prior year period.
Speaker Change: Compared with $7 2 million for the prior year period.
Speaker Change: Operating loss margin was 24%.
Speaker Change: Compared with 0.9% for the.
Speaker Change: Prior year period non-GAAP loss from operations.
Speaker Change: First quarter of 2024, with 107 million RMB as compared with 62 4 million for the prior year period.
Speaker Change: Yes operating loss margin was 13, 8% as compared with eight 1% for the prior year period.
Speaker Change: Net loss for the first quarter of 2024.
Speaker Change: $124 9 million RMB as compared with net income of $50 7 million RMB for the prior year period net loss margin was 16, 1% as compared with net income margin of six 6% for the <unk>.
Donghao Yang: The net loss margin was 16.1% as compared with the net income margin of 6.6% for the prior year period. Net loss attributable to Yatsen's Ordinary Shareholders for diluted ADS for the first quarter of 2024 was 1.16 RMB as compared with net income attributable to Yatsen's Ordinary Shareholders for diluted ADS of 1.16 RMB. 0.42 RMB for the Taiyue period. Non-GAP net loss for the first quarter of 2024 was 83.8 million RMB as compared with 25.8 million RMB for the prior period.
Speaker Change: Five year period.
Speaker Change: Net loss attributable to.
Speaker Change: Ordinary shareholders per diluted EPS for the fourth quarter of 2024 with 1.16 RMB.
Speaker Change: Paired with net income attributable to ordinary shareholders per diluted ads.
Speaker Change: 0.4 to RMB for the prior year period.
Speaker Change: non-GAAP net loss for the first quarter of 2024 was $83.
Speaker Change: And R&D as compared with 45.
Speaker Change: <unk> for the prior year period, non-GAAP net loss margin.
Donghao Yang: None yet lost margins with 10.3%, as compared with 3.4% for the prior year period. Non-GAF net loss attributable to Yatsen's ordinary shareholders for diluted EDS for the first quarter of 2024 was 0.78 RMB, as compared with 0.24 RMB for the prior year period. As of March 31, 2024, we had cash, restricted cash, and short-term investments of 1.89 billion RMB, as compared with 2.08 billion RMB as of December 31, 2023. Net cash used in operating activities for the first quarter of 2024 was 121.8 million RMB as compared with 20.2 million for the prior year period.
Speaker Change: 10, 6%.
Speaker Change: As compared with three 4% for the prior year period.
Speaker Change: non-GAAP net loss attributable to.
Speaker Change: Ordinary shareholders per diluted ads for.
Speaker Change: For the first quarter of 2004 with 0.78, RMB as compared with <unk> two for R&D for the prior year period.
Speaker Change: As of March 31, 2024, we had a cat specific tests.
Speaker Change: Short term investments.
Speaker Change: 189 billion RMB as compared with two point full face.
1 billion RMB.
Speaker Change: December 31 2023.
Yeah.
Speaker Change: Net cash used in operating activities for the first quarter of 2024 was 441 8 million RMB as compared with $20 2 million.
Speaker Change: Prior year period.
Donghao Yang: Looking at our business outlook for the second quarter of 2024, we expect our total net revenue to be between 858.6 million RMB and 901.5 million RMB, representing a year-over-year increase of approximately 0% to 5%. These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change. With that, I would now like to open the call to Q&A. Operator. We will now...
Speaker Change: Looking at our business outlook for the second quarter of 2024.
Speaker Change: Our total net revenues to be between $858 6 million RMB 10, 901, 5 million, representing a year over year increase of approximately zero percent Phil.
Speaker Change: 5%.
These forecasts reflect our current and preliminary views on the market and operational conditions.
Speaker Change: It is subject to change.
Speaker Change: With that I would now like to open the call for Q&A.
Speaker Change: Operator.
Speaker Change: We will now begin the question and answer session.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question today comes from Maggie Huang with CICC. Please go ahead. Well, thanks for taking my call.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: For the benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Yeah.
Speaker Change: The first question today comes from Maggie Huang with C. ICC. Please go ahead.
Maggie Luyao Huang: Thanks for taking my question. This is Maggie Huang from CICC.
Speaker Change: Yeah no. Thanks for taking my question. This is Maggie Kwan from CRT D C and I have two questions. My first question is about our strategy for the coming June 18th Shopping Festival and also do we have package growth rates, respectively for our skincare and also kind of cosmetic.
Maggie Luyao Huang: I have two questions. My first question is about our strategy for the coming June 18th shopping festival and also, do we have a target growth rate respectively for our skin care and also color cosmetic brands? That's my first question, and my second question is regarding our selling and marketing expenses ratio. The management mentioned that we increased our investment in brand equity building in Q1. So what is our plan to allocate our expenses between such kinds of branding and online traffic acquisition? And how should we expect the change in this expense ratio for the whole year? That's my two questions. Thank you.
Speaker Change: And that's my first question and my second question is regarding our selling and marketing expenses ratio and the management have mentioned that we increased our investment in brand equity building in Q1. So what is our plan to allocate our expenses victory such kind of friends.
Speaker Change: And I'm not sure I think acquisition and how should we expect the change of these expense ratio for the whole year and.
Speaker Change: That's my two questions. Thank you.
Speaker Change: Okay.
Jinfeng Huang: Thank you for your questions. Let me try to answer the first one.
Speaker Change: Thank you for your questions let.
Speaker Change: Let me try to answer your first one.
Speaker Change: Well. This is Oh, you have a loss of one or two years.
Jinfeng Huang: Well, in the last one or two years, you know, the major shopping festivals, online shopping festivals in China, you know, their influence has gradually come down. Brand owners or manufacturers, like cars, are relying less and less on both shopping festivals in terms of sales growth. That said, we're still making our efforts to try to sell more of our products during those festivals. And this year, the 2018 festival is actually a bit different from the previous years.
Speaker Change: It'll be a major issue.
Speaker Change: Sovereign vessels online shopping festivals in China.
Speaker Change: Ah as gradually come down.
Speaker Change: Brand owners are.
Speaker Change: Manufacturers like us are relying less and less.
Speaker Change: Those are some vessels.
Speaker Change: In terms of our sales growth.
Speaker Change: But.
Speaker Change: That said, we're still making our efforts to try to.
Speaker Change: More of a product turned us festivals and this year the 618 festival.
Speaker Change: <unk> is a bit different from the previous years.
Jinfeng Huang: So this year, the festival started on May the 20th, but it's going to last a lot longer than the previous years. So it's so hard for us to tell what our performance ourselves at that festival this year will be. It's going to take us some more time to be able to tell that.
Speaker Change: So this year the peso started on may the 20th but it's going to last a lot longer than the previous yourself. It's so hard for us to tell.
Speaker Change: You know what the performance ourself on that festival this year will be a it's.
Speaker Change: I'm going to take us some more fun.
Speaker Change: Are you able to tell that.
Speaker Change:
Jinfeng Huang: And you also asked about our growth forecast for skin care and color cosmetics. Unfortunately, we're not providing that kind of growth forecast, except for our guidance for sales for the second quarter. And your second question is about following marketing expenses, the split between branding and traffic. Well, it really depends on how our... [inaudible] So we're currently trying to control or make better use of our selling and marketing expenses. And as you can see, in Q1, our selling and marketing expenses were a bit higher compared to the previous quarter. And we are actually taking measures to take that down and to make sure that, you know... You know, we've become profitable in the near to mid-term.
Speaker Change: And you also asked about our grocery forecast.
Speaker Change: So I think here in color cosmetics.
Maggie Luyao Huang: Okay, I got it. That's very helpful. Thank you very much, and I have no more questions.
We're not providing.
Speaker Change: Is that kind of growth forecast except for <unk>.
Speaker Change: Our guidance for the.
Speaker Change: Sales for the second quarter.
Speaker Change: And your second question, our selling and marketing.
Speaker Change: Extensive slip between mining and topics are well it really depends on how our.
Speaker Change: Actually when you bought a lot before.
Speaker Change: So we're currently.
Speaker Change: <unk> signed two.
Speaker Change: Consult or make better use of our selling and marketing expenses.
Speaker Change: And as you can see in Q1, and our selling and marketing expenses.
Compared to.
Speaker Change: The previous quarter, and we are actually taking measures.
Speaker Change: Decided to take it down and to make sure that.
Speaker Change: The.
We become profitable.
Speaker Change: In the near to midterm.
Speaker Change: [noise], Okay got it that's very helpful. Thank you very much and I have no more question.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks.
Jinfeng Huang: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Speaker Change: [noise]. Thank you once again for joining us today, if you have any further questions.
Jinfeng Huang: Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or at GFB. Our contact information for IR in both China and the U.S. can be found in today's press release. Thank you. Have a great day.
Speaker Change: So it's just something that I see we're at yes.
Speaker Change: CFC.
Speaker Change: Hold on April four equal, China, and the U S can be found in today's press release.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].