Yatsen, the owner of Eve Lom and Galénic, has reported a double digit sales decline in its Q3 2023 results.
Revenues at the China-based holding company decreased by 16.3% to ¥718.1m (US$98.4m), compared with ¥857.9m during the same quarter last year.
Colour cosmetics saw the biggest slump at 21.5%, along with a 4.1% decrease in skin care sales.
Despite net losses decreasing by 6.1% to ¥197.9m, an improvement on the ¥210.7m loss reported last year, the overall poor sales led to a profits decline of 13.3% to ¥512.8m.
The Guangzhou-based firm has been grappling with the sluggish recovery of China's beauty industry following the Covid-19 pandemic.
Although beauty retail sales in China increased by 2.6% in Q3, this was a decline in growth compared with the previous quarter, according to the National Bureau of the Statistics of China.
Increased investments in its flagship brand Perfect Dairy also placed a strain on its Q3 turnover, claimed Yatsen.
The brand owner has been doubling its focus on the Chinese cosmetics brand this year to revitalise and reposition the business following a difficult year.
Yatsen closed 25 Perfect Diary stores in Q3.
Donghao Yang, CFO and Director of Yatsen, said he is aware of the business's financial struggles over the past two years, but remains optimistic for its performance in 2024.
He stated that the declines have “hopefully” bottomed out and that he expects sales to gain traction in the foreseeable future.
"China's beauty industry continued to recover modestly in the third quarter,” added Jinfeng Huang, founder, Chairman and CEO of Yatsen.
“Amid uncertainties in consumer demand, we remained focused on building strong brand equity based on superior product performance and consumer satisfaction.”