Yatsen Holding Limited reported second-quarter 2026 revenue of RMB1.14 billion, up 5.1% from a year earlier, as skincare revenue surged 40.4% to RMB816.1 million and reached 71.5% of total sales. The growth more than offset a 35.8% decline in color cosmetics revenue. Gross margin fell to 73.9% from 78.3%, while net loss widened to RMB90.8 million from RMB19.5 million. The company attributed the margin pressure primarily to higher inventory provisions tied to brand-portfolio optimization and SKU rationalization (reducing the number of product variations). Yatsen said it is streamlining color cosmetics and redirecting resources toward clinical and premium skincare brands including Galénic, DR.WU and Eve Lom. Selling and marketing expenses rose 11.8% to RMB807.6 million, partly reflecting investments in skincare brand awareness and higher Douyin traffic-acquisition costs. Yatsen appointed Li Wang as Co-Chief Financial Officer effective September 2, 2026, and expects her to succeed Donghao Yang after the release of the 2026 annual report on Form 20-F. The company forecast third-quarter revenue of RMB898.6 million to RMB998.4 million, representing an approximately 0% to 10% year-over-year decline.